The Container Store Group, Inc. (TCS) Discounted Future Market Cap

The Container Store Group, Inc.

TCS (NYSE)

(%)

Valuation
The Container Store Group, 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	0 USD
Estimated net income	0 USD
Estimated market capitalization	0 USD
Market capitalization discounted to present	0 USD
Shares Outstanding	3.32 Mil.
Earnings Per Share (EPS)	-29.85 USD
Market Price	2.65 USD
Price to Earnings (PE) Ratio	-0.085

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": "2014", "x": "2015-02-28", "y": 781866000}, {"l": "2015", "x": "2016-02-27", "y": 794630000}, {"l": "2016", "x": "2017-04-01", "y": 819930000}, {"l": "2017", "x": "2018-03-31", "y": 857228000}, {"l": "2018", "x": "2019-03-30", "y": 895093000}, {"l": "2019", "x": "2020-03-28", "y": 915953000}, {"l": "2020", "x": "2021-04-03", "y": 990088000}, {"l": "2021", "x": "2022-04-02", "y": 1094119000}, {"l": "2022", "x": "2023-04-01", "y": 1047258000}, {"l": "2023", "x": "2024-03-30", "y": 847779000}, {"l": "2024", "x": "2025-03-30", "y": 855587044, "oy": 855587044, "e": true, "d": 2024, "g": 0.921, "og": 0.921}, {"l": "2025", "x": "2026-03-30", "y": 863467001, "oy": 863467001, "e": true, "d": 2025, "g": 0.921, "og": 0.921}, {"l": "2026", "x": "2027-03-30", "y": 871419532, "oy": 871419532, "e": true, "d": 2026, "g": 0.921, "og": 0.921}, {"l": "2027", "x": "2028-03-30", "y": 879445306, "oy": 879445306, "e": true, "d": 2027, "g": 0.921, "og": 0.921}, {"l": "2028", "x": "2029-03-30", "y": 887544997, "oy": 887544997, "e": true, "d": 2028, "g": 0.921, "og": 0.921}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2014", "x": "2015-02-28", "y": 22673000}, {"l": "2015", "x": "2016-02-27", "y": 5142000}, {"l": "2016", "x": "2017-04-01", "y": 14953000}, {"l": "2017", "x": "2018-03-31", "y": 19428000}, {"l": "2018", "x": "2019-03-30", "y": 21680000}, {"l": "2019", "x": "2020-03-28", "y": 14487000}, {"l": "2020", "x": "2021-04-03", "y": 58283000}, {"l": "2021", "x": "2022-04-02", "y": 81718000}, {"l": "2022", "x": "2023-04-01", "y": -158856000}, {"l": "2023", "x": "2024-03-30", "y": -103287000}, {"l": "2024", "x": "2025-03-30", "y": 0.0, "oy": 0.0, "e": true, "d": 2024, "g": -100.0, "og": -100.0}, {"l": "2025", "x": "2026-03-30", "y": 0.0, "oy": 0.0, "e": true, "d": 2025, "g": null, "og": null}, {"l": "2026", "x": "2027-03-30", "y": 0.0, "oy": 0.0, "e": true, "d": 2026, "g": null, "og": null}, {"l": "2027", "x": "2028-03-30", "y": 0.0, "oy": 0.0, "e": true, "d": 2027, "g": null, "og": null}, {"l": "2028", "x": "2029-03-30", "y": 0.0, "oy": 0.0, "e": true, "d": 2028, "g": null, "og": null}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2025-03-30": 15, "2026-03-30": 16, "2027-03-30": 17, "2028-03-30": 18, "2029-03-30": 19}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2025-03-30	2026-03-30	2027-03-30	2028-03-30	2029-03-30

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2023 Mar 30	LTM Feb 18	2024 Mar 30	2025 Mar 30	2026 Mar 30	2027 Mar 30	2028 Mar 30
Revenue	847.8	799.4	855.6	863.5	871.4	879.4	887.5
Revenue Growth Rate	-19.05%	-5.71%	0.921%	0.921%	0.921%	0.921%	0.921%
Net Income	-103.3	-98.64	0	0	0	0	0

Monetary values in USD

amounts except #

2023
Mar 30

LTM
Feb 18

2024
Mar 30

2025
Mar 30

2026
Mar 30

2027
Mar 30

2028
Mar 30

Revenue

847.8

799.4

855.6

863.5

871.4

879.4

887.5

Revenue Growth Rate

-19.05%

-5.71%

0.921%

Net Income

-103.3

-98.64

Historical Values

Monetary values in USD amounts except #	Average	LTM Feb 18	2023 Mar 30	2022 Apr 01	2021 Apr 02	2020 Apr 03	2019 Mar 28	2018 Mar 30	2017 Mar 31	2016 Apr 01	2015 Feb 27	2014 Feb 28
Revenue	894.8	799.4	847.8	1,047	1,094	990.1	916	895.1	857.2	819.9	794.6	781.9
Cost of Revenue	377.7	359.5	359	446.3	457.9	419.6	382.5	371.4	360.2	343.9	331.1	323.8
Gross Profit	517.1	439.9	488.8	601	636.2	570.5	533.5	523.7	497.1	476.1	463.6	458.1
Gross Margin	57.78%	55.03%	57.65%	57.38%	58.15%	57.62%	58.24%	58.51%	57.98%	58.06%	58.34%	58.59%
Operating Income	37.09	-23.04	-104.7	70.24	125.5	99	42.74	51.32	34.09	41.04	24.86	46.97
Operating Margin	3.77%	-2.88%	-12.35%	6.71%	11.47%	10%	4.67%	5.73%	3.98%	5.01%	3.13%	6.01%
Net Income	-11.13	-98.64	-103.3	-158.9	81.72	58.28	14.49	21.68	19.43	14.95	5.14	22.67
Net Margin	-1.34%	-12.34%	-12.18%	-15.17%	7.47%	5.89%	1.58%	2.42%	2.27%	1.82%	0.647%	2.9%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Feb 18	2023 Mar 30	2022 Apr 01	2021 Apr 02	2020 Apr 03	2019 Mar 28	2018 Mar 30	2017 Mar 31	2016 Apr 01	2015 Feb 27	2014 Feb 28
Revenue	894.8	799.4	847.8	1,047	1,094	990.1	916	895.1	857.2	819.9	794.6	781.9
Revenue Growth Rate	0.921%	-5.71%	-19.05%	-4.28%	10.51%	8.09%	2.33%	4.42%	4.55%	3.18%	1.63%	4.45%
Net Income	-11.13	-98.64	-103.3	-158.9	81.72	58.28	14.49	21.68	19.43	14.95	5.14	22.67
Net Margin	-1.34%	-12.34%	-12.18%	-15.17%	7.47%	5.89%	1.58%	2.42%	2.27%	1.82%	0.647%	2.9%
Net Income Growth Rate	28.01%	-4.5%	-34.98%	-294.4%	40.21%	302.3%	-33.18%	11.59%	29.93%	190.8%	-77.32%	177.7%
Stockholders Equity	250.2	132.8	159.7	262.2	428.1	353.7	271.7	264.7	248.7	221.8	207.1	201.9
Equity Growth Rate	-0.926%	-16.82%	-39.09%	-38.76%	21.04%	30.17%	2.65%	6.43%	12.14%	7.11%	2.58%	2.37%
Return on Invested Capital (ROIC)	4.84%	-2.6%	-11.94%	9.85%	9.6%	8.44%	3.24%	8.44%	16.07%	3.95%	2.5%	5.71%
After-tax Operating Income	35.56	-17.94	-86.26	77.61	90.97	71.38	29.21	50.66	98.77	25.2	15.88	35.66
Income Tax Rate	2.42%	22.12%	17.64%	-10.5%	27.49%	27.91%	31.67%	1.28%	-189.8%	38.6%	36.13%	24.08%
Invested Capital	728	691.4	722.3	787.9	947.8	845.9	900.9	600.1	614.4	638	634.2	624.9