Starbucks Corporation (SBUX) Discounted Future Market Cap

Starbucks Corporation

SBUX (NASDAQ)

(%)

Valuation
Starbucks Corporation 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	265.3 USD
Estimated net income	5.47 Bil. USD
Estimated market capitalization	451.9 Bil. USD
Market capitalization discounted to present	301.9 Bil. USD
Shares Outstanding	1.14 Bil.
Earnings Per Share (EPS)	1.21 USD
Market Price	99.45 USD
Price to Earnings (PE) Ratio	82.68

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": "2016-09-30", "y": 21315900000}, {"l": "2017", "x": "2017-09-30", "y": 22386800000}, {"l": "2018", "x": "2018-09-30", "y": 24719500000}, {"l": "2019", "x": "2019-09-30", "y": 26508600000}, {"l": "2020", "x": "2020-09-30", "y": 23518000000}, {"l": "2021", "x": "2021-09-30", "y": 29060600000}, {"l": "2022", "x": "2022-09-30", "y": 32250300000}, {"l": "2023", "x": "2023-09-30", "y": 35975600000}, {"l": "2024", "x": "2024-09-30", "y": 36176200000}, {"l": "2025", "x": "2025-09-28", "y": 37184400000}, {"l": "2026", "x": "2026-09-28", "y": 39667202388, "oy": 39667202388, "e": true, "d": 2026, "g": 6.68, "og": 6.68}, {"l": "2027", "x": "2027-09-28", "y": 42315781491, "oy": 42315781491, "e": true, "d": 2027, "g": 6.68, "og": 6.68}, {"l": "2028", "x": "2028-09-28", "y": 45141206221, "oy": 45141206221, "e": true, "d": 2028, "g": 6.68, "og": 6.68}, {"l": "2029", "x": "2029-09-28", "y": 48155284561, "oy": 48155284561, "e": true, "d": 2029, "g": 6.68, "og": 6.68}, {"l": "2030", "x": "2030-09-28", "y": 51370612911, "oy": 51370612911, "e": true, "d": 2030, "g": 6.68, "og": 6.68}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-09-30", "y": 2817700000}, {"l": "2017", "x": "2017-09-30", "y": 2884700000}, {"l": "2018", "x": "2018-09-30", "y": 4518300000}, {"l": "2019", "x": "2019-09-30", "y": 3599200000}, {"l": "2020", "x": "2020-09-30", "y": 928300000}, {"l": "2021", "x": "2021-09-30", "y": 4199300000}, {"l": "2022", "x": "2022-09-30", "y": 3281600000}, {"l": "2023", "x": "2023-09-30", "y": 4124500000}, {"l": "2024", "x": "2024-09-30", "y": 3760900000}, {"l": "2025", "x": "2025-09-28", "y": 1856400000}, {"l": "2026", "x": "2026-09-28", "y": 4220590334, "oy": 4220590334, "e": true, "d": 2026, "g": 127.4, "og": 127.4}, {"l": "2027", "x": "2027-09-28", "y": 4502399150, "oy": 4502399150, "e": true, "d": 2027, "g": 6.68, "og": 6.68}, {"l": "2028", "x": "2028-09-28", "y": 4803024341, "oy": 4803024341, "e": true, "d": 2028, "g": 6.68, "og": 6.68}, {"l": "2029", "x": "2029-09-28", "y": 5123722277, "oy": 5123722277, "e": true, "d": 2029, "g": 6.68, "og": 6.68}, {"l": "2030", "x": "2030-09-28", "y": 5465833213, "oy": 5465833213, "e": true, "d": 2030, "g": 6.68, "og": 6.68}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-09-28": 36, "2027-09-28": 37, "2028-09-28": 38, "2029-09-28": 39, "2030-09-28": 40}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2026-09-28	2027-09-28	2028-09-28	2029-09-28	2030-09-28

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2025 Sep 28	LTM Feb 07	2026 Sep 28	2027 Sep 28	2028 Sep 28	2029 Sep 28	2030 Sep 28
Revenue	37,184	37,695	39,667	42,316	45,141	48,155	51,371
Revenue Growth Rate	2.79%	1.37%	6.68%	6.68%	6.68%	6.68%	6.68%
Net Income	1,856	1,369	4,221	4,502	4,803	5,124	5,466

Monetary values in USD

amounts except #

2025
Sep 28

LTM
Feb 07

2026
Sep 28

2027
Sep 28

2028
Sep 28

2029
Sep 28

2030
Sep 28

Revenue

37,184

37,695

39,667

42,316

45,141

48,155

51,371

Revenue Growth Rate

2.79%

1.37%

6.68%

Net Income

1,856

1,369

4,221

4,502

4,803

5,124

5,466

Historical Values

Monetary values in USD amounts except #	Average	LTM Feb 07	2025 Sep 28	2024 Sep 30	2023 Sep 30	2022 Sep 30	2021 Sep 30	2020 Sep 30	2019 Sep 30	2018 Sep 30	2017 Sep 30	2016 Sep 30
Revenue	29,708	37,695	37,184	36,176	35,976	32,250	29,061	23,518	26,509	24,720	22,387	21,316
Cost of Revenue	21,844	29,931	28,203	26,467	26,129	23,879	20,670	18,459	19,020	17,403	15,552	14,573
Gross Profit	7,864	7,764	8,982	9,709	9,846	8,371	8,391	5,059	7,488	7,317	6,835	6,743
Gross Margin	26.85%	20.6%	24.15%	26.84%	27.37%	25.96%	28.87%	21.51%	28.25%	29.6%	30.53%	31.63%
Operating Income	4,143	3,394	3,581	5,409	5,871	4,618	4,872	1,562	4,078	3,883	4,135	4,172
Operating Margin	14.25%	9.01%	9.63%	14.95%	16.32%	14.32%	16.77%	6.64%	15.38%	15.71%	18.47%	19.57%
Net Income	3,031	1,369	1,856	3,761	4,124	3,282	4,199	928.3	3,599	4,518	2,885	2,818
Net Margin	10.64%	3.63%	4.99%	10.4%	11.46%	10.18%	14.45%	3.95%	13.58%	18.28%	12.89%	13.22%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Feb 07	2025 Sep 28	2024 Sep 30	2023 Sep 30	2022 Sep 30	2021 Sep 30	2020 Sep 30	2019 Sep 30	2018 Sep 30	2017 Sep 30	2016 Sep 30
Revenue	29,708	37,695	37,184	36,176	35,976	32,250	29,061	23,518	26,509	24,720	22,387	21,316
Revenue Growth Rate	6.68%	1.37%	2.79%	0.558%	11.55%	10.98%	23.57%	-11.28%	7.24%	10.42%	5.02%	11.24%
Net Income	3,031	1,369	1,856	3,761	4,124	3,282	4,199	928.3	3,599	4,518	2,885	2,818
Net Margin	10.64%	3.63%	4.99%	10.4%	11.46%	10.18%	14.45%	3.95%	13.58%	18.28%	12.89%	13.22%
Net Income Growth Rate	21.56%	-26.26%	-50.64%	-8.82%	25.69%	-21.85%	352.4%	-74.21%	-20.34%	56.63%	2.38%	2.19%
Stockholders Equity	-4,317	-8,389	-8,097	-7,449	-7,995	-8,707	-5,321	-7,805	-6,232	1,170	5,450	5,884
Equity Growth Rate	-60.3%	3.61%	8.7%	-6.83%	-8.18%	63.62%	-31.82%	25.24%	-632.9%	-78.54%	-7.37%	1.13%
Return on Invested Capital (ROIC)	23.35%	9.19%	11.35%	21.57%	27.09%	22.38%	22.76%	7.02%	31.67%	31.24%	35.96%	36.6%
After-tax Operating Income	2,982	1,592	2,110	4,095	4,483	3,583	3,820	1,240	3,282	3,035	2,763	2,801
Income Tax Rate	28.56%	53.11%	41.09%	24.29%	23.64%	22.41%	21.59%	20.59%	19.52%	21.83%	33.18%	32.86%
Invested Capital	14,303	17,328	18,590	18,983	16,549	16,008	16,786	17,677	10,364	9,716	7,683	7,654