NIKE, Inc. (NKE) Discounted Future Market Cap

NIKE, Inc.

NKE (NYSE)

(%)

Valuation
NIKE, 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	81.59 USD
Estimated net income	5.44 Bil. USD
Estimated market capitalization	194.1 Bil. USD
Market capitalization discounted to present	120.6 Bil. USD
Shares Outstanding	1.48 Bil.
Earnings Per Share (EPS)	1.71 USD
Market Price	60.93 USD
Price to Earnings (PE) Ratio	35.68

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": "2016-05-31", "y": 32376000000}, {"l": "2017", "x": "2017-05-31", "y": 34350000000}, {"l": "2018", "x": "2018-05-31", "y": 36397000000}, {"l": "2019", "x": "2019-05-31", "y": 39117000000}, {"l": "2020", "x": "2020-05-31", "y": 37403000000}, {"l": "2021", "x": "2021-05-31", "y": 44538000000}, {"l": "2022", "x": "2022-05-31", "y": 46710000000}, {"l": "2023", "x": "2023-05-31", "y": 51217000000}, {"l": "2024", "x": "2024-05-31", "y": 51362000000}, {"l": "2025", "x": "2025-05-31", "y": 46309000000}, {"l": "2026", "x": "2026-05-31", "y": 48221561700, "oy": 48221561700, "e": true, "d": 2026, "g": 4.13, "og": 4.13}, {"l": "2027", "x": "2027-05-31", "y": 50213112198, "oy": 50213112198, "e": true, "d": 2027, "g": 4.13, "og": 4.13}, {"l": "2028", "x": "2028-05-31", "y": 52286913731, "oy": 52286913731, "e": true, "d": 2028, "g": 4.13, "og": 4.13}, {"l": "2029", "x": "2029-05-31", "y": 54446363269, "oy": 54446363269, "e": true, "d": 2029, "g": 4.13, "og": 4.13}, {"l": "2030", "x": "2030-05-31", "y": 56694998072, "oy": 56694998072, "e": true, "d": 2030, "g": 4.13, "og": 4.13}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-05-31", "y": 3760000000}, {"l": "2017", "x": "2017-05-31", "y": 4240000000}, {"l": "2018", "x": "2018-05-31", "y": 1933000000}, {"l": "2019", "x": "2019-05-31", "y": 4029000000}, {"l": "2020", "x": "2020-05-31", "y": 2539000000}, {"l": "2021", "x": "2021-05-31", "y": 5727000000}, {"l": "2022", "x": "2022-05-31", "y": 6046000000}, {"l": "2023", "x": "2023-05-31", "y": 5070000000}, {"l": "2024", "x": "2024-05-31", "y": 5700000000}, {"l": "2025", "x": "2025-05-31", "y": 3219000000}, {"l": "2026", "x": "2026-05-31", "y": 4626376629, "oy": 4626376629, "e": true, "d": 2026, "g": 43.72, "og": 43.72}, {"l": "2027", "x": "2027-05-31", "y": 4817445984, "oy": 4817445984, "e": true, "d": 2027, "g": 4.13, "og": 4.13}, {"l": "2028", "x": "2028-05-31", "y": 5016406503, "oy": 5016406503, "e": true, "d": 2028, "g": 4.13, "og": 4.13}, {"l": "2029", "x": "2029-05-31", "y": 5223584092, "oy": 5223584092, "e": true, "d": 2029, "g": 4.13, "og": 4.13}, {"l": "2030", "x": "2030-05-31", "y": 5439318115, "oy": 5439318115, "e": true, "d": 2030, "g": 4.13, "og": 4.13}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-05-31": 41, "2027-05-31": 42, "2028-05-31": 43, "2029-05-31": 44, "2030-05-31": 45}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2026-05-31	2027-05-31	2028-05-31	2029-05-31	2030-05-31

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2025 May 31	LTM Feb 04	2026 May 31	2027 May 31	2028 May 31	2029 May 31	2030 May 31
Revenue	46,309	46,513	48,222	50,213	52,287	54,446	56,695
Revenue Growth Rate	-9.84%	0.441%	4.13%	4.13%	4.13%	4.13%	4.13%
Net Income	3,219	2,524	4,626	4,817	5,016	5,224	5,439

Monetary values in USD

amounts except #

2025
May 31

LTM
Feb 04

2026
May 31

2027
May 31

2028
May 31

2029
May 31

2030
May 31

Revenue

46,309

46,513

48,222

50,213

52,287

54,446

56,695

Revenue Growth Rate

-9.84%

0.441%

4.13%

Net Income

3,219

2,524

4,626

4,817

5,016

5,224

5,439

Historical Values

Monetary values in USD amounts except #	Average	LTM Feb 04	2025 May 31	2024 May 31	2023 May 31	2022 May 31	2021 May 31	2020 May 31	2019 May 31	2018 May 31	2017 May 31	2016 May 31
Revenue	42,390	46,513	46,309	51,362	51,217	46,710	44,538	37,403	39,117	36,397	34,350	32,376
Cost of Revenue	23,709	27,381	26,519	28,475	28,925	25,231	24,576	21,162	21,643	20,441	19,038	17,405
Gross Profit	18,681	19,132	19,790	22,887	22,292	21,479	19,962	16,241	17,474	15,956	15,312	14,971
Gross Margin	44.14%	41.13%	42.73%	44.56%	43.52%	45.98%	44.82%	43.42%	44.67%	43.84%	44.58%	46.24%
Operating Income	4,924	3,042	3,702	6,311	5,915	6,675	6,937	3,115	4,772	4,445	4,749	4,502
Operating Margin	11.7%	6.54%	7.99%	12.29%	11.55%	14.29%	15.58%	8.33%	12.2%	12.21%	13.83%	13.91%
Net Income	4,072	2,524	3,219	5,700	5,070	6,046	5,727	2,539	4,029	1,933	4,240	3,760
Net Margin	9.59%	5.43%	6.95%	11.1%	9.9%	12.94%	12.86%	6.79%	10.3%	5.31%	12.34%	11.61%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Feb 04	2025 May 31	2024 May 31	2023 May 31	2022 May 31	2021 May 31	2020 May 31	2019 May 31	2018 May 31	2017 May 31	2016 May 31
Revenue	42,390	46,513	46,309	51,362	51,217	46,710	44,538	37,403	39,117	36,397	34,350	32,376
Revenue Growth Rate	4.13%	0.441%	-9.84%	0.283%	9.65%	4.88%	19.08%	-4.38%	7.47%	5.96%	6.1%	5.8%
Net Income	4,072	2,524	3,219	5,700	5,070	6,046	5,727	2,539	4,029	1,933	4,240	3,760
Net Margin	9.59%	5.43%	6.95%	11.1%	9.9%	12.94%	12.86%	6.79%	10.3%	5.31%	12.34%	11.61%
Net Income Growth Rate	9.73%	-21.59%	-43.53%	12.43%	-16.14%	5.57%	125.6%	-36.98%	108.4%	-54.41%	12.77%	14.88%
Stockholders Equity	12,305	14,085	13,213	14,430	14,004	15,281	12,767	8,055	9,040	9,812	12,407	12,258
Equity Growth Rate	2.64%	6.6%	-8.43%	3.04%	-8.36%	19.69%	58.5%	-10.9%	-7.87%	-20.92%	1.22%	-3.53%
Return on Invested Capital (ROIC)	24.79%	12.99%	16.54%	30.41%	23.21%	28.87%	32.81%	18.62%	35.17%	16.22%	29.48%	28.42%
After-tax Operating Income	4,028	2,490	3,067	5,369	4,836	6,068	5,964	2,740	4,005	1,987	4,121	3,662
Income Tax Rate	18.81%	18.13%	17.14%	14.93%	18.24%	9.1%	14.02%	12.05%	16.08%	55.31%	13.22%	18.67%
Invested Capital	16,419	19,173	18,549	17,657	20,834	21,017	18,177	14,710	11,385	12,247	13,977	12,883