Citigroup Inc. (C) Discounted Future Market Cap

Citigroup Inc.

C (NYSE)

(%)

Valuation
Citigroup 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	145.3 USD
Estimated net income	29.03 Bil. USD
Estimated market capitalization	408.2 Bil. USD
Market capitalization discounted to present	264.6 Bil. USD
Shares Outstanding	1.82 Bil.
Earnings Per Share (EPS)	7.08 USD
Market Price	110.2 USD
Price to Earnings (PE) Ratio	14.06

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": 83309000000}, {"l": "2017", "x": "2017-12-31", "y": 88962000000}, {"l": "2018", "x": "2018-12-31", "y": 97120000000}, {"l": "2019", "x": "2019-12-31", "y": 103449000000}, {"l": "2020", "x": "2020-12-31", "y": 88832000000}, {"l": "2021", "x": "2021-12-31", "y": 79868000000}, {"l": "2022", "x": "2022-12-31", "y": 100220000000}, {"l": "2023", "x": "2023-12-31", "y": 155382000000}, {"l": "2024", "x": "2024-12-31", "y": 170707000000}, {"l": "2025", "x": "2025-12-31", "y": 168302000000}, {"l": "2026", "x": "2026-12-31", "y": 180786642360, "oy": 180786642360, "e": true, "d": 2026, "g": 7.42, "og": 7.42}, {"l": "2027", "x": "2027-12-31", "y": 194197395490, "oy": 194197395490, "e": true, "d": 2027, "g": 7.42, "og": 7.42}, {"l": "2028", "x": "2028-12-31", "y": 208602958287, "oy": 208602958287, "e": true, "d": 2028, "g": 7.42, "og": 7.42}, {"l": "2029", "x": "2029-12-31", "y": 224077125733, "oy": 224077125733, "e": true, "d": 2029, "g": 7.42, "og": 7.42}, {"l": "2030", "x": "2030-12-31", "y": 240699166920, "oy": 240699166920, "e": true, "d": 2030, "g": 7.42, "og": 7.42}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-12-31", "y": 14912000000}, {"l": "2017", "x": "2017-12-31", "y": -6798000000}, {"l": "2018", "x": "2018-12-31", "y": 18045000000}, {"l": "2019", "x": "2019-12-31", "y": 19401000000}, {"l": "2020", "x": "2020-12-31", "y": 11047000000}, {"l": "2021", "x": "2021-12-31", "y": 21952000000}, {"l": "2022", "x": "2022-12-31", "y": 14845000000}, {"l": "2023", "x": "2023-12-31", "y": 9228000000}, {"l": "2024", "x": "2024-12-31", "y": 12682000000}, {"l": "2025", "x": "2025-12-31", "y": 14268000000}, {"l": "2026", "x": "2026-12-31", "y": 21802869068, "oy": 21802869068, "e": true, "d": 2026, "g": 52.81, "og": 52.81}, {"l": "2027", "x": "2027-12-31", "y": 23420205896, "oy": 23420205896, "e": true, "d": 2027, "g": 7.42, "og": 7.42}, {"l": "2028", "x": "2028-12-31", "y": 25157516769, "oy": 25157516769, "e": true, "d": 2028, "g": 7.42, "og": 7.42}, {"l": "2029", "x": "2029-12-31", "y": 27023701363, "oy": 27023701363, "e": true, "d": 2029, "g": 7.42, "og": 7.42}, {"l": "2030", "x": "2030-12-31", "y": 29028319530, "oy": 29028319530, "e": true, "d": 2030, "g": 7.42, "og": 7.42}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-12-31": 41, "2027-12-31": 42, "2028-12-31": 43, "2029-12-31": 44, "2030-12-31": 45}, "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 Mar 01	2026 Dec 31	2027 Dec 31	2028 Dec 31	2029 Dec 31	2030 Dec 31
Revenue	168,302	168,302	180,787	194,197	208,603	224,077	240,699
Revenue Growth Rate	-1.41%	0%	7.42%	7.42%	7.42%	7.42%	7.42%
Net Income	14,268	14,268	21,803	23,420	25,158	27,024	29,028

Monetary values in USD

amounts except #

2025
Dec 31

LTM
Mar 01

2026
Dec 31

2027
Dec 31

2028
Dec 31

2029
Dec 31

2030
Dec 31

Revenue

168,302

180,787

194,197

208,603

224,077

240,699

Revenue Growth Rate

-1.41%

7.42%

Net Income

14,268

21,803

23,420

25,158

27,024

29,028

Historical Values

Monetary values in USD amounts except #	Average	LTM Mar 01	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	118,587	168,302	168,302	170,707	155,382	100,220	79,868	88,832	103,449	97,120	88,962	83,309
Cost of Revenue	50,086	93,322	93,322	99,587	87,481	30,852	4,090	30,713	36,692	31,733	23,860	19,290
Gross Profit	68,501	74,980	74,980	71,120	67,901	69,368	75,778	58,119	66,757	65,387	65,102	64,019
Gross Margin	62.35%	44.55%	44.55%	41.66%	43.7%	69.22%	94.88%	65.43%	64.53%	67.33%	73.18%	76.85%
Operating Income	20,100	19,828	19,828	17,046	12,910	18,807	27,469	13,632	23,901	23,445	22,761	21,477
Operating Margin	19%	11.78%	11.78%	9.99%	8.31%	18.77%	34.39%	15.35%	23.1%	24.14%	25.59%	25.78%
Net Income	13,077	14,268	14,268	12,682	9,228	14,845	21,952	11,047	19,401	18,045	-6,798	14,912
Net Margin	12.06%	8.48%	8.48%	7.43%	5.94%	14.81%	27.49%	12.44%	18.75%	18.58%	-7.64%	17.9%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Mar 01	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	118,587	168,302	168,302	170,707	155,382	100,220	79,868	88,832	103,449	97,120	88,962	83,309
Revenue Growth Rate	7.42%	0%	-1.41%	9.86%	55.04%	25.48%	-10.09%	-14.13%	6.52%	9.17%	6.79%	-5.63%
Net Income	13,077	14,268	14,268	12,682	9,228	14,845	21,952	11,047	19,401	18,045	-6,798	14,912
Net Margin	12.06%	8.48%	8.48%	7.43%	5.94%	14.81%	27.49%	12.44%	18.75%	18.58%	-7.64%	17.9%
Net Income Growth Rate	-43.78%	0%	12.51%	37.43%	-37.84%	-32.38%	98.71%	-43.06%	7.51%	-365.4%	-145.6%	-13.51%
Stockholders Equity	205,142	212,291	212,291	208,598	205,453	201,189	201,972	199,442	193,242	196,220	200,740	225,120
Equity Growth Rate	-0.329%	0%	1.77%	1.53%	2.12%	-0.388%	1.27%	3.21%	-1.52%	-2.25%	-10.83%	1.47%
Return on Invested Capital (ROIC)	4.19%	1.86%	1.86%	4.45%	3.05%	6.92%	8.16%	5%	6.35%	6.09%	-2.1%	4.51%
After-tax Operating Income	13,217	14,455	14,455	12,835	9,382	15,165	22,018	11,107	19,471	18,088	-6,627	15,033
Income Tax Rate	33.13%	27.1%	27.1%	24.7%	27.33%	19.37%	19.84%	18.52%	18.53%	22.85%	129.1%	30%
Invested Capital	374,036	777,336	777,336	288,248	307,773	219,292	269,933	222,254	306,766	297,118	314,886	333,458