AT&T Inc. (T) Discounted Future Market Cap

AT&T Inc.

T (NYSE)

(%)

Valuation
AT&T 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.")

Model Info

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	11.42 USD
Estimated net income	12.08 Bil. USD
Estimated market capitalization	113.5 Bil. USD
Market capitalization discounted to present	81.86 Bil. USD
Shares Outstanding	7.17 Bil.
Earnings Per Share (EPS)	3.06 USD
Market Price	28.69 USD
Price to Earnings (PE) Ratio	9.4

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": 163786000000}, {"l": "2017", "x": "2017-12-31", "y": 160546000000}, {"l": "2018", "x": "2018-12-31", "y": 170756000000}, {"l": "2019", "x": "2019-12-31", "y": 181193000000}, {"l": "2020", "x": "2020-12-31", "y": 171760000000}, {"l": "2021", "x": "2021-12-31", "y": 134038000000}, {"l": "2022", "x": "2022-12-31", "y": 120741000000}, {"l": "2023", "x": "2023-12-31", "y": 122428000000}, {"l": "2024", "x": "2024-12-31", "y": 122336000000}, {"l": "2025", "x": "2025-12-31", "y": 125648000000}, {"l": "2026", "x": "2026-12-31", "y": 125648000000, "oy": 125648000000, "e": true, "d": 2026, "g": 0.0, "og": 0.0}, {"l": "2027", "x": "2027-12-31", "y": 125648000000, "oy": 125648000000, "e": true, "d": 2027, "g": 0.0, "og": 0.0}, {"l": "2028", "x": "2028-12-31", "y": 125648000000, "oy": 125648000000, "e": true, "d": 2028, "g": 0.0, "og": 0.0}, {"l": "2029", "x": "2029-12-31", "y": 125648000000, "oy": 125648000000, "e": true, "d": 2029, "g": 0.0, "og": 0.0}, {"l": "2030", "x": "2030-12-31", "y": 125648000000, "oy": 125648000000, "e": true, "d": 2030, "g": 0.0, "og": 0.0}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-12-31", "y": 12976000000}, {"l": "2017", "x": "2017-12-31", "y": 29450000000}, {"l": "2018", "x": "2018-12-31", "y": 19370000000}, {"l": "2019", "x": "2019-12-31", "y": 13903000000}, {"l": "2020", "x": "2020-12-31", "y": -5176000000}, {"l": "2021", "x": "2021-12-31", "y": 20081000000}, {"l": "2022", "x": "2022-12-31", "y": -8524000000}, {"l": "2023", "x": "2023-12-31", "y": 14400000000}, {"l": "2024", "x": "2024-12-31", "y": 10948000000}, {"l": "2025", "x": "2025-12-31", "y": 21889000000}, {"l": "2026", "x": "2026-12-31", "y": 12078542240, "oy": 12078542240, "e": true, "d": 2026, "g": -44.82, "og": -44.82}, {"l": "2027", "x": "2027-12-31", "y": 12078542240, "oy": 12078542240, "e": true, "d": 2027, "g": 0.0, "og": 0.0}, {"l": "2028", "x": "2028-12-31", "y": 12078542240, "oy": 12078542240, "e": true, "d": 2028, "g": 0.0, "og": 0.0}, {"l": "2029", "x": "2029-12-31", "y": 12078542240, "oy": 12078542240, "e": true, "d": 2029, "g": 0.0, "og": 0.0}, {"l": "2030", "x": "2030-12-31", "y": 12078542240, "oy": 12078542240, "e": true, "d": 2030, "g": 0.0, "og": 0.0}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-12-31": 42, "2027-12-31": 43, "2028-12-31": 44, "2029-12-31": 45, "2030-12-31": 46}, "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 Feb 14	2026 Dec 31	2027 Dec 31	2028 Dec 31	2029 Dec 31	2030 Dec 31
Revenue	125,648	125,648	125,648	125,648	125,648	125,648	125,648
Revenue Growth Rate	2.71%	0%	0%	0%	0%	0%	0%
Net Income	21,889	21,889	12,079	12,079	12,079	12,079	12,079

Monetary values in USD

amounts except #

2025
Dec 31

LTM
Feb 14

2026
Dec 31

2027
Dec 31

2028
Dec 31

2029
Dec 31

2030
Dec 31

Revenue

125,648

Revenue Growth Rate

2.71%

Net Income

21,889

12,079

Historical Values

Monetary values in USD amounts except #	Average	LTM Feb 14	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	145,353	125,648	125,648	122,336	122,428	120,741	134,038	171,760	181,193	170,756	160,546	163,786
Cost of Revenue	75,380	20,234	25,424	69,801	68,900	50,848	60,407	108,436	112,358	107,849	102,197	102,731
Gross Profit	69,983	105,414	100,224	52,535	53,528	69,893	73,631	63,324	68,907	62,956	58,349	61,055
Gross Margin	49.87%	83.9%	79.77%	42.94%	43.72%	57.89%	54.93%	36.87%	38.03%	36.87%	36.34%	37.28%
Operating Income	22,804	23,583	24,162	24,261	24,768	-4,587	25,897	25,717	30,377	27,289	23,507	25,874
Operating Margin	15.61%	18.77%	19.23%	19.83%	20.23%	-3.8%	19.32%	14.97%	16.76%	15.98%	14.64%	15.8%
Net Income	13,746	21,889	21,889	10,948	14,400	-8,524	20,081	-5,176	13,903	19,370	29,450	12,976
Net Margin	9.61%	17.42%	17.42%	8.95%	11.76%	-7.06%	14.98%	-3.01%	7.67%	11.34%	18.34%	7.92%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Feb 14	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	145,353	125,648	125,648	122,336	122,428	120,741	134,038	171,760	181,193	170,756	160,546	163,786
Revenue Growth Rate	-0.999%	0%	2.71%	-0.075%	1.4%	-9.92%	-21.96%	-5.21%	6.11%	6.36%	-1.98%	11.57%
Net Income	13,746	21,889	21,889	10,948	14,400	-8,524	20,081	-5,176	13,903	19,370	29,450	12,976
Net Margin	9.61%	17.42%	17.42%	8.95%	11.76%	-7.06%	14.98%	-3.01%	7.67%	11.34%	18.34%	7.92%
Net Income Growth Rate	-81.7%	0%	99.94%	-23.97%	-268.9%	-142.4%	-488%	-137.2%	-28.22%	-34.23%	127%	-2.77%
Stockholders Equity	135,141	110,533	110,533	104,372	103,297	97,500	166,332	161,673	184,221	184,089	140,861	123,135
Equity Growth Rate	0.699%	0%	5.9%	1.04%	5.95%	-41.38%	2.88%	-12.24%	0.072%	30.69%	14.4%	0.378%
Return on Invested Capital (ROIC)	5.64%	5.87%	6.01%	5.17%	5.58%	-2.97%	4.95%	7.6%	5.23%	4.74%	14.84%	5.01%
After-tax Operating Income	21,295	20,421	20,922	17,803	19,496	-10,191	21,108	34,406	24,632	21,891	46,345	17,413
Income Tax Rate	-8.05%	13.41%	13.41%	26.62%	21.29%	-122.2%	18.49%	-33.79%	18.91%	19.78%	-97.15%	32.7%
Invested Capital	382,225	348,184	348,184	344,625	349,211	342,979	426,169	452,583	470,628	462,240	312,210	347,457