Franklin International Growth Fund (FILRX) Discounted Future Market Cap

Franklin International Growth Fund

FILRX (NASDAQ)

(%)

Valuation
Franklin International Growth Fund 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("quote:close") / data.get("income:eps"),
        "%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",
})

assumptions.set("%net_income_margin",
                data.average(f"%netMargin:{-assumptions.get('historical_years')}->0"))  # Historical average
assumptions.set("%revenue_growth_rate",
                data.average(f"%revenueGrowthRate:{-assumptions.get('historical_years')}->0"))  # Historical average

# Calculate a linear regression for forecasting revenues
data.compute({
    "linearRegressionRevenue": f"function:linear_regression:income:revenue start:{-assumptions.get('historical_years')}",
}, forecast=assumptions.get("projection_years"))

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

projected_revenue = data.get("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)", "$"],
    [data.get("quote:close"), "Market Price", "$"],
    [data.get("ratio:priceEarningsRatio"), "Price to Earnings (PE) Ratio", "#"]
])

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

# 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 18.02 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	-0.148 USD
Estimated net income	-910.5 Thou. USD
Estimated market capitalization	-4.71 Mil. USD
Market capitalization discounted to present	-2.88 Mil. USD
Shares Outstanding	19.46 Mil.
Earnings Per Share (EPS)	3.48 USD
Market Price	18.02 USD
Price to Earnings (PE) Ratio	5.17

Historical and forecasted data

In Millions of USD

{"sectionId": "section-chart-1", "sectionType": "chart", "title": "Historical and forecasted data", "dates": [2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, 2029], "series": [{"label": "Revenue", "mappingKey": "income:revenue", "data": [18.87, 8.57, 12.58, 10.87, 13.7, 3.41, 5.78, 7.0, null, null, {"y": 0.683, "oy": 0.683, "e": true, "c": 2025, "g": -90.26, "og": -90.26}, {"y": 0.737, "oy": 0.737, "e": true, "c": 2026, "g": 7.94, "og": 7.94}, {"y": 0.795, "oy": 0.795, "e": true, "c": 2027, "g": 7.94, "og": 7.94}, {"y": 0.858, "oy": 0.858, "e": true, "c": 2028, "g": 7.94, "og": 7.94}, {"y": 0.927, "oy": 0.927, "e": true, "c": 2029, "g": 7.94, "og": 7.94}], "dataType": ".", "numberFormat": "M", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [-201.6, 42.25, -4.96, 17.25, 18.55, -110.8, 43.13, 67.79, null, null, {"y": -0.671, "oy": -0.671, "e": true, "c": 2025, "g": -101.0, "og": -101.0}, {"y": -0.724, "oy": -0.724, "e": true, "c": 2026, "g": 7.94, "og": 7.94}, {"y": -0.781, "oy": -0.781, "e": true, "c": 2027, "g": 7.94, "og": 7.94}, {"y": -0.844, "oy": -0.844, "e": true, "c": 2028, "g": 7.94, "og": 7.94}, {"y": -0.911, "oy": -0.911, "e": true, "c": 2029, "g": 7.94, "og": 7.94}], "dataType": ".", "numberFormat": "M", "hidden": false}, {"label": "Linear Regression Revenue", "mappingKey": "linearRegressionRevenue", "data": [15.17, 13.72, 12.27, 10.82, 9.37, 7.93, 6.48, 5.03, 3.58, 2.13, 0.683, -0.766, -2.21, -3.66, -5.11], "dataType": ".", "numberFormat": "M", "hidden": true}], "editableDates": {"2025": 36, "2026": 37, "2027": 38, "2028": 39, "2029": 40}, "properties": {"number_format": "M", "display_table": true}, "width": "full"}

Edit Chart Values	2025	2026	2027	2028	2029

↳ Growth Rate

Estimated Future Values

amounts of USD except for #	LTM	2025	2026	2027	2028	2029
Revenue	7	0.683	0.737	0.795	0.858	0.927
Revenue Growth Rate			7.94%	7.94%	7.94%	7.94%
Net Income	67.79	-0.671	-0.724	-0.781	-0.844	-0.911

Historical Values

amounts of USD except for #	Average	LTM	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	9.75	7	7	5.78	3.41	13.7	10.87	12.58	8.57	18.87
Cost of Revenue		0	0	0	0	0	0	0	0	0
Gross Profit	9.75	7	7	5.78	3.41	13.7	10.87	12.58	8.57	18.87
Gross Margin	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%
Operating Income	3.75	2.75	2.75	1.88	-0.94	7.31	3.79	5.25	1.56	9.38
Operating Margin	31.27%	39.29%	39.29%	32.54%	-27.55%	53.33%	34.83%	41.74%	18.21%	49.71%
Net Income	-6.73	67.79	67.79	43.13	-110.8	18.55	17.25	-4.96	42.25	-201.6
Net Margin	-98.25%	967.9%	967.9%	746.3%	-3,246%	135.4%	158.7%	-39.46%	493%	-1,068%

Historical Growth Rates

amounts of USD except for #	Average	LTM	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	9.75	7	7	5.78	3.41	13.7	10.87	12.58	8.57	18.87
Revenue Growth Rate	7.94%		21.19%	69.34%	-75.08%	25.99%	-13.58%	46.77%	-54.57%	43.48%
Net Income	-6.73	67.79	67.79	43.13	-110.8	18.55	17.25	-4.96	42.25	-201.6
Net Margin	-98.25%	967.9%	967.9%	746.3%	-3,246%	135.4%	158.7%	-39.46%	493%	-1,068%
Net Income Growth Rate	-211.8%		57.17%	-138.9%	-697.2%	7.54%	-447.5%	-111.7%	-121%	-242.5%
Stockholders Equity	373.9	285.4	310.4	265.7	249.5	397.9	425.1	449.4	489.7	491.8
Equity Growth Rate	-8.47%		16.81%	6.49%	-37.28%	-6.41%	-5.4%	-8.24%	-0.422%	-33.28%
Return on Invested Capital (ROIC)	0.736%	0.564%	0.535%	0.422%	-0.374%	1.04%	1.59%	1.03%	0.129%	1.68%
After-tax Operating Income	4.6	2.14	2.14	1.44	-1.13	5.97	9.86	7.21	1	12.74
Income Tax Rate	-14.66%	22.15%	22.15%	23.32%	-20.21%	18.28%	-160.4%	-37.24%	35.91%	-35.87%
Invested Capital	538.8	379.8	400.3	341.6	302	574.7	619.2	697.6	776.9	757.3

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Franklin International Growth Fund Discounted Future Market Cap

Estimated Value

USD

Market Price 18.02 USD

#Discounted Future Market Cap

Interactive Assumptions

#Discount Rate

#Beta

#Risk-Free Rate

#Market Premium

#Price to Earnings (PE) Ratio

#Revenue Growth Rate

#Net Income Margin

#Historical Years

#Projection Years

Results

Historical and forecasted data

Estimated Future Values

Historical Values

Historical Growth Rates