BlackRock, Inc. (BLK) Discounted Future Market Cap

BlackRock, Inc.

BLK (NYSE)

(%)

Valuation
BlackRock, Inc. Discounted Future Market Cap

"""
    Model: Discounted Future Market Cap

# Render model description
model.render_description(r"""
## Discounted Future Market Cap

This model estimates the intrinsic value of a common share by projecting the Future Market Capitalization using the estimated PE Ratio and then discounting it to the Present using an Annual Required Rate of Return.
""")

# Initialize assumptions
assumptions.init({
    "data": {
        "%discount_rate": None,
        "beta": data.get("profile:beta", default=1),
        "%risk_free_rate": data.get("treasury:year10"),
        "%market_premium": data.get("risk:totalEquityRiskPremium"),
        "pe_ratio": data.get("ratio:priceEarningsRatio"),
        "%revenue_growth_rate": None,
        "%net_income_margin": None,
        "historical_years": 10,
        "projection_years": 5,
    },
    "hierarchies": [{
        "parent": "%discount_rate",
        "children": ["beta", "%risk_free_rate", "%market_premium"]
    }]
})

# Calculate cost of equity
cost_of_equity = assumptions.get("%risk_free_rate") + assumptions.get("beta") * assumptions.get("%market_premium")
assumptions.set("%discount_rate", cost_of_equity)

# Compute metrics
data.compute({
    "%grossMargin": "income:grossProfit / income:revenue",
    "%operating_margin": "income:operatingIncome / income:revenue",
    "%netMargin": "income:netIncome / income:revenue",
    "%revenueGrowthRate": "function:growth:income:revenue",
    "%netIncomeGrowthRate": "function:growth:income:netIncome",
    "%totalStockholdersEquityGrowthRate": "function:growth:balance:totalStockholdersEquity",

# Calculating NOPAT (Net Operating Profit After Taxes)
    "%taxRate": "income:incomeTaxExpense / income:incomeBeforeTax",
    "incomeTax": "income:operatingIncome * %taxRate",
    "nopat": "income:operatingIncome - incomeTax",

# Calculating Invested Capital
    "investedCapital": [
        "balance:totalNonCurrentAssets", "-", "balance:cashAndCashEquivalents", "+",
        "balance:totalCurrentAssets", "-", "balance:totalCurrentLiabilities"
    ],
    "%roic": "nopat / investedCapital",
})

data.set_default_range(f"{-assumptions.get('historical_years')}->0")

assumptions.set("%net_income_margin", data.average(f"%netMargin"))
assumptions.set_bounds(
    "%net_income_margin", low=0, high="100%"
)

assumptions.set("%revenue_growth_rate", data.average(f"%revenueGrowthRate"))
assumptions.set_bounds(
    "%revenue_growth_rate", low=0, high="25%"
)

# Compute forecasted values and ratios
data.compute({
    "income:revenue": f"""
        income:revenue:-1 * 
        (1 + {assumptions.get('%revenue_growth_rate')})
    """,
    "%revenueGrowthRate": "function:growth:income:revenue",
    "income:netIncome": f"income:revenue * {assumptions.get('%net_income_margin')}",
}, forecast=assumptions.get("projection_years"))

projected_revenue = data.get("income:revenue")
projected_net_income = data.get(f"income:netIncome:{assumptions.get('projection_years')}")

shares_outstanding = data.get("income:weightedAverageShsOut")
future_market_cap = assumptions.get("pe_ratio") * projected_net_income
discounted_future_market_cap = future_market_cap / (
            (1 + assumptions.get("%discount_rate")) ** assumptions.get("projection_years"))

stock_value = discounted_future_market_cap / shares_outstanding

# Set the final value
model.set_final_value({
    "value": stock_value,
    "units": "$"
})

# Render results
model.render_results([
    [stock_value, "Present Value", "$"],
    [projected_net_income, "Estimated net income", "$"],
    [future_market_cap, "Estimated market capitalization", "$"],
    [discounted_future_market_cap, "Market capitalization discounted to present", "$"],
    [shares_outstanding, "Shares Outstanding", "#"],
    [data.get("income:eps"), "Earnings Per Share (EPS)", "$"],
    [data.get("profile:price"), "Market Price", "$"],
    [data.get("ratio:priceEarningsRatio"), "Price to Earnings (PE) Ratio", "#"]
])

# Render chart
model.render_chart({
    "data": {
        "income:revenue": "Revenue",
        "income:netIncome": "Net Income"
    },
    "start": -assumptions.get("historical_years"),
    "end": "*",
    "properties": {
        "title": "Historical and forecasted data",
        "set_editable": [
            "income:revenue",
            "income:netIncome"
        ]
    }
})

# Render table for estimated future values
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
    },
    "start": -1,
    "end": "*",
    "properties": {
        "title": "Estimated Future Values",
        "order": "ascending",
        "number_format": "M"
    }
})

# Render historical values table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "income:costOfRevenue": "Cost of Revenue",
        "income:grossProfit": "Gross Profit",
        "%grossMargin": "Gross Margin",
        "income:operatingIncome": "Operating Income",
        "%operating_margin": "Operating Margin",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Values",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Render historical growth rates table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
        "%netIncomeGrowthRate": "Net Income Growth Rate",
        "balance:totalStockholdersEquity": "Stockholders Equity",
        "%totalStockholdersEquityGrowthRate": "Equity Growth Rate",
        "%roic": "Return on Invested Capital (ROIC)",
        "nopat": "After-tax Operating Income",
        "%taxRate": "Income Tax Rate",
        "investedCapital": "Invested Capital",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Growth Rates",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Set description for assumptions
assumptions.set_description({
    "%discount_rate": r"""
        ## Discount Rate

`Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium`

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

[Read More](https://www.investopedia.com/terms/c/costofequity.asp#mntl-sc-block_1-0-20)
    """,

"beta": r"""
        ## Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.
    """,

"%risk_free_rate": r"""
        ## Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
        By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.
    """,

"%market_premium": r"""
        ## Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.
    """,

"pe_ratio": r"""
        ## Price to Earnings (PE) Ratio

Estimated Price to Earnings (PE) Ratio at the end of the projection period.

`Future Market Cap` = `PE Ratio` * `Projected Net Income`
    """,

"%revenue_growth_rate": r"""
        ## Revenue Growth Rate

The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.
    """,

"%net_income_margin": r"""
        ## Net Income Margin

Net Income expressed as a percentage of Revenue.
    """,

"historical_years": r"""
        ## Historical Years

The number of historical years used to calculate averages for historical data.
    """,

"projection_years": r"""
        ## Projection Years

The number of years for projecting the analysis into the future.
    """,
})

print("End of model.")

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Discounted Future Market Cap

Interactive Assumptions

Discount Rate Discount Rate `Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium` The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula. Read More	%
↳ Beta Beta Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.	#
↳ Risk Free Rate Risk-Free Rate The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.	%
↳ Market Premium Market Premium Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.	%
Pe Ratio Price to Earnings (PE) Ratio Estimated Price to Earnings (PE) Ratio at the end of the projection period. `Future Market Cap` = `PE Ratio` * `Projected Net Income`	#
Revenue Growth Rate Revenue Growth Rate The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.	%
Net Income Margin Net Income Margin Net Income expressed as a percentage of Revenue.	%
Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Projection Years Projection Years The number of years for projecting the analysis into the future.	#

Results
Present Value	1.2 Thou. USD
Estimated net income	10.1 Bil. USD
Estimated market capitalization	312.2 Bil. USD
Market capitalization discounted to present	186.5 Bil. USD
Shares Outstanding	155.1 Mil.
Earnings Per Share (EPS)	35.84 USD
Market Price	1.11 Thou. USD
Price to Earnings (PE) Ratio	30.91

Historical and forecasted data

Monetary values in USD

{"sectionId": "section-chart-1", "sectionType": "chart", "title": "Historical and forecasted data", "timeseries": "annual", "series": [{"label": "Revenue", "mappingKey": "income:revenue", "data": [{"l": "2016", "x": "2016-12-31", "y": 12261000000}, {"l": "2017", "x": "2017-12-31", "y": 13600000000}, {"l": "2018", "x": "2018-12-31", "y": 14198000000}, {"l": "2019", "x": "2019-12-31", "y": 14539000000}, {"l": "2020", "x": "2020-12-31", "y": 16205000000}, {"l": "2021", "x": "2021-12-31", "y": 19374000000}, {"l": "2022", "x": "2022-12-31", "y": 17873000000}, {"l": "2023", "x": "2023-12-31", "y": 17859000000}, {"l": "2024", "x": "2024-12-31", "y": 20407000000}, {"l": "2025", "x": "2025-12-31", "y": 24216000000}, {"l": "2026", "x": "2026-12-31", "y": 26007741840, "oy": 26007741840, "e": true, "d": 2026, "g": 7.4, "og": 7.4}, {"l": "2027", "x": "2027-12-31", "y": 27932054658, "oy": 27932054658, "e": true, "d": 2027, "g": 7.4, "og": 7.4}, {"l": "2028", "x": "2028-12-31", "y": 29998747382, "oy": 29998747382, "e": true, "d": 2028, "g": 7.4, "og": 7.4}, {"l": "2029", "x": "2029-12-31", "y": 32218354701, "oy": 32218354701, "e": true, "d": 2029, "g": 7.4, "og": 7.4}, {"l": "2030", "x": "2030-12-31", "y": 34602190766, "oy": 34602190766, "e": true, "d": 2030, "g": 7.4, "og": 7.4}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-12-31", "y": 3172000000}, {"l": "2017", "x": "2017-12-31", "y": 4952000000}, {"l": "2018", "x": "2018-12-31", "y": 4305000000}, {"l": "2019", "x": "2019-12-31", "y": 4476000000}, {"l": "2020", "x": "2020-12-31", "y": 4932000000}, {"l": "2021", "x": "2021-12-31", "y": 5901000000}, {"l": "2022", "x": "2022-12-31", "y": 5178000000}, {"l": "2023", "x": "2023-12-31", "y": 5502000000}, {"l": "2024", "x": "2024-12-31", "y": 6369000000}, {"l": "2025", "x": "2025-12-31", "y": 5553000000}, {"l": "2026", "x": "2026-12-31", "y": 7591659843, "oy": 7591659843, "e": true, "d": 2026, "g": 36.71, "og": 36.71}, {"l": "2027", "x": "2027-12-31", "y": 8153366754, "oy": 8153366754, "e": true, "d": 2027, "g": 7.4, "og": 7.4}, {"l": "2028", "x": "2028-12-31", "y": 8756634361, "oy": 8756634361, "e": true, "d": 2028, "g": 7.4, "og": 7.4}, {"l": "2029", "x": "2029-12-31", "y": 9404537737, "oy": 9404537737, "e": true, "d": 2029, "g": 7.4, "og": 7.4}, {"l": "2030", "x": "2030-12-31", "y": 10100379484, "oy": 10100379484, "e": true, "d": 2030, "g": 7.4, "og": 7.4}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-12-31": 29, "2027-12-31": 30, "2028-12-31": 31, "2029-12-31": 32, "2030-12-31": 33}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2026-12-31	2027-12-31	2028-12-31	2029-12-31	2030-12-31

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2025 Dec 31	LTM Jan 28	2026 Dec 31	2027 Dec 31	2028 Dec 31	2029 Dec 31	2030 Dec 31
Revenue	24,216	24,216	26,008	27,932	29,999	32,218	34,602
Revenue Growth Rate	18.67%	0%	7.4%	7.4%	7.4%	7.4%	7.4%
Net Income	5,553	5,553	7,592	8,153	8,757	9,405	10,100

Monetary values in USD

amounts except #

2025
Dec 31

LTM
Jan 28

2026
Dec 31

2027
Dec 31

2028
Dec 31

2029
Dec 31

2030
Dec 31

Revenue

24,216

26,008

27,932

29,999

32,218

34,602

Revenue Growth Rate

18.67%

7.4%

Net Income

5,553

7,592

8,153

8,757

9,405

10,100

Historical Values

Monetary values in USD amounts except #	Average	LTM Jan 28	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	17,704	24,216	24,216	20,407	17,859	17,873	19,374	16,205	14,539	14,198	13,600	12,261
Cost of Revenue	8,637	10,771	10,771	10,321	9,277	9,189	9,556	7,939	7,133	6,993	6,811	6,243
Gross Profit	9,068	13,445	13,445	10,086	8,582	8,684	9,818	8,266	7,406	7,205	6,789	6,018
Gross Margin	50.86%	55.52%	55.52%	49.42%	48.05%	48.59%	50.68%	51.01%	50.94%	50.75%	49.92%	49.08%
Operating Income	6,209	7,045	7,045	7,574	6,275	6,385	7,450	5,695	5,551	5,457	5,254	4,570
Operating Margin	35.66%	29.09%	29.09%	37.11%	35.14%	35.72%	38.45%	35.14%	38.18%	38.43%	38.63%	37.27%
Net Income	5,081	5,553	5,553	6,369	5,502	5,178	5,901	4,932	4,476	4,305	4,952	3,172
Net Margin	29.19%	22.93%	22.93%	31.21%	30.81%	28.97%	30.46%	30.44%	30.79%	30.32%	36.41%	25.87%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Jan 28	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	17,704	24,216	24,216	20,407	17,859	17,873	19,374	16,205	14,539	14,198	13,600	12,261
Revenue Growth Rate	7.4%	0%	18.67%	14.27%	-0.078%	-7.75%	19.56%	11.46%	2.4%	4.4%	10.92%	7.54%
Net Income	5,081	5,553	5,553	6,369	5,502	5,178	5,901	4,932	4,476	4,305	4,952	3,172
Net Margin	29.19%	22.93%	22.93%	31.21%	30.81%	28.97%	30.46%	30.44%	30.79%	30.32%	36.41%	25.87%
Net Income Growth Rate	6.24%	0%	-12.81%	15.76%	6.26%	-12.25%	19.65%	10.19%	3.97%	-13.07%	56.12%	-5.17%
Stockholders Equity	37,992	55,519		47,495	39,347	37,744	37,693	35,283	33,547	32,374	31,825	29,098
Equity Growth Rate	5.99%			20.71%	4.25%	0.135%	6.83%	5.17%	3.62%	1.73%	9.37%	2.09%
Return on Invested Capital (ROIC)	3.36%	3.64%		4.78%	4.4%	4.65%	3.98%	2.76%	2.67%	2.88%	2.35%	1.52%
After-tax Operating Income	4,926	5,494	5,494	5,946	4,978	5,069	5,656	4,614	4,341	4,365	4,984	3,248
Income Tax Rate	20.52%	22.01%	22.01%	21.49%	20.67%	20.6%	24.08%	18.98%	21.79%	20.01%	5.13%	28.92%
Invested Capital	154,633	151,057		124,317	113,235	108,918	141,928	167,290	162,626	151,793	212,042	213,122