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This model simulates the Earnings Yield and Price Change of a stock, which is often sufficient for gauging the possible returns on a stock. Future share-prices are simulated using P/S (Price-To-Sales) ratios which allows for the earnings to be zero or negative. This model only simulates a single period of earnings and share-prices. If you need to simulate multiple periods then use another model instead.

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The Earnings Yield is simulated from the company's future earnings, divided by the current market-cap. Assuming the earnings were to continue every year into the future, and they were to be paid out as dividends, then the earnings yield can be compared to government bond yields, to assess whether the stock would give a sufficient return, considering that the stock is probably more risky than government bonds.

\[ \mathbf{Earnings\ Yield} = \left( \frac{Earnings \cdot (1 - TaxRate\ Dividends)}{Current\ MarketCap\ Adj} + 1 \right)^{1/Year} - 1 \]

The future earnings are simulated from your input distributions for the sales and net profit margin:

\[ Earnings = Sales \cdot Net\ Profit\ Margin \]

The current market-value of all the company's shares is:

\[ Current\ MarketCap = Current\ Share\ Price \cdot Current\ Shares \]

This can be adjusted for excess cash or debt, either in case the company has a lot of cash it does not need in the future, or if the company has too much debt that must be repaid to improve the company's financial health:

\[ Current\ MarketCap\ Adj = Current\ MarketCap - (Excess\ Cash\ or\ Debt - Tax\ Excess\ Cash) \] \[ Tax\ Excess\ Cash = OnlyPos(Excess\ Cash\ or\ Debt) \cdot TaxRate\ Dividends \]

The Price Change of the stock is simulated from the future and current market-cap:

\[ \mathbf{Price\ Change} = \left( \frac{Future\ MarketCap - Tax\ MCapGains}{Current\ MarketCap\ Adj} \right)^{1/Year} - 1 \]

The company's future market-cap is simulated by multiplying your input distributions for the future sales and P/S ratios. If you can perfectly predict these two numbers then you can predict the future market-cap with complete accuracy:

\[ Future\ MarketCap = Sales \cdot P/S\ Ratio \]

The capital gains tax is calculated from the \(Current\ MarketCap\) defined in the Earnings Yield tab:

\[ Tax\ MCapGains = OnlyPos(Future\ MarketCap - Current\ MarketCap) \cdot TaxRate\ CapGains \]

Lululemon (LULU)

Earnings Yield and Price Change of Stock using P/S Ratios (Model STK‑YLD‑PS)

@SimSim 2 months ago

Current Share-Price

Current Shares

Excess Cash or Debt

Currency

Sales

General

Interpolate

Net Profit Margin

General

Interpolate

7.567% ; 0.01934%
7.693% ; 0.2509%
7.818% ; 0.315%
7.943% ; 0.2788%
8.069% ; 0.1934%
8.194% ; 0.1052%
8.32% ; 0.04481%
8.445% ; 0.01497%
8.571% ; 0.004015%
8.696% ; 0.001467%
8.822% ; 0.003582%
8.947% ; 0.01422%
9.073% ; 0.04635%
9.198% ; 0.1204%
9.324% ; 0.2497%
9.449% ; 0.4159%
9.575% ; 0.56%
9.7% ; 0.6206%
9.826% ; 0.5946%
9.951% ; 0.5549%
10.08% ; 0.591%
10.2% ; 0.7245%
10.33% ; 0.8903%
10.45% ; 1.004%
10.58% ; 1.046%
10.7% ; 1.074%
10.83% ; 1.139%
10.96% ; 1.228%
11.08% ; 1.283%
11.21% ; 1.267%
11.33% ; 1.202%
11.46% ; 1.142%
11.58% ; 1.133%
11.71% ; 1.184%
11.83% ; 1.289%
11.96% ; 1.442%
12.08% ; 1.628%
12.21% ; 1.801%
12.34% ; 1.913%
12.46% ; 1.965%
12.59% ; 1.975%
12.71% ; 1.945%
12.84% ; 1.859%
12.96% ; 1.725%
13.09% ; 1.584%
13.21% ; 1.462%
13.34% ; 1.359%
13.47% ; 1.289%
13.59% ; 1.308%
13.72% ; 1.443%
13.84% ; 1.62%
13.97% ; 1.704%
14.09% ; 1.628%
14.22% ; 1.48%
14.34% ; 1.441%
14.47% ; 1.635%
14.59% ; 2.031%
14.72% ; 2.467%
14.85% ; 2.751%
14.97% ; 2.779%
15.1% ; 2.596%
15.22% ; 2.339%
15.35% ; 2.11%
15.47% ; 1.895%
15.6% ; 1.614%
15.72% ; 1.247%
15.85% ; 0.8733%
15.98% ; 0.5995%
16.1% ; 0.453%
16.23% ; 0.3738%
16.35% ; 0.2945%
16.48% ; 0.2051%
16.6% ; 0.1419%
16.73% ; 0.1401%
16.85% ; 0.2021%
16.98% ; 0.2964%
17.1% ; 0.3816%
17.23% ; 0.4462%
17.36% ; 0.5233%
17.48% ; 0.6606%
17.61% ; 0.8733%
17.73% ; 1.121%
17.86% ; 1.323%
17.98% ; 1.415%
18.11% ; 1.413%
18.23% ; 1.4%
18.36% ; 1.43%
18.49% ; 1.474%
18.61% ; 1.464%
18.74% ; 1.361%
18.86% ; 1.168%
18.99% ; 0.9069%
19.11% ; 0.6238%
19.24% ; 0.3903%
19.36% ; 0.2658%
19.49% ; 0.2536%
19.61% ; 0.2968%
19.74% ; 0.3192%
19.87% ; 0.2517%
19.99% ; 0.01936%

P/S Ratio

General

Interpolate

0.7037 ; 0.002906%
0.8268 ; 0.06271%
0.95 ; 0.131%
1.073 ; 0.2054%
1.196 ; 0.2846%
1.319 ; 0.3565%
1.443 ; 0.3978%
1.566 ; 0.3927%
1.689 ; 0.3538%
1.812 ; 0.3008%
1.935 ; 0.2456%
2.058 ; 0.2159%
2.182 ; 0.2464%
2.305 ; 0.326%
2.428 ; 0.4004%
2.551 ; 0.4396%
2.674 ; 0.4752%
2.797 ; 0.555%
2.921 ; 0.6993%
3.044 ; 0.9318%
3.167 ; 1.297%
3.29 ; 1.748%
3.413 ; 2.088%
3.536 ; 2.185%
3.659 ; 2.157%
3.783 ; 2.212%
3.906 ; 2.363%
4.029 ; 2.431%
4.152 ; 2.283%
4.275 ; 2.022%
4.398 ; 1.875%
4.522 ; 1.928%
4.645 ; 2.091%
4.768 ; 2.257%
4.891 ; 2.392%
5.014 ; 2.471%
5.137 ; 2.438%
5.261 ; 2.25%
5.384 ; 1.935%
5.507 ; 1.606%
5.63 ; 1.392%
5.753 ; 1.352%
5.876 ; 1.418%
5.999 ; 1.457%
6.123 ; 1.416%
6.246 ; 1.37%
6.369 ; 1.396%
6.492 ; 1.479%
6.615 ; 1.581%
6.738 ; 1.697%
6.862 ; 1.812%
6.985 ; 1.859%
7.108 ; 1.773%
7.231 ; 1.572%
7.354 ; 1.357%
7.477 ; 1.232%
7.601 ; 1.211%
7.724 ; 1.22%
7.847 ; 1.199%
7.97 ; 1.167%
8.093 ; 1.14%
8.216 ; 1.091%
8.339 ; 1.02%
8.463 ; 0.9743%
8.586 ; 0.9755%
8.709 ; 1%
8.832 ; 1.031%
8.955 ; 1.067%
9.078 ; 1.093%
9.202 ; 1.079%
9.325 ; 0.9975%
9.448 ; 0.8698%
9.571 ; 0.7641%
9.694 ; 0.7206%
9.817 ; 0.713%
9.941 ; 0.7049%
10.06 ; 0.6928%
10.19 ; 0.6774%
10.31 ; 0.6432%
10.43 ; 0.594%
10.56 ; 0.5592%
10.68 ; 0.5453%
10.8 ; 0.5223%
10.93 ; 0.471%
11.05 ; 0.4037%
11.17 ; 0.3404%
11.3 ; 0.2851%
11.42 ; 0.2282%
11.54 ; 0.1696%
11.66 ; 0.12%
11.79 ; 0.0829%
11.91 ; 0.05803%
12.03 ; 0.04603%
12.16 ; 0.04141%
12.28 ; 0.03942%
12.4 ; 0.04533%
12.53 ; 0.05999%
12.65 ; 0.06752%
12.77 ; 0.0493%
12.9 ; 0.00306%

Year

Constant

Tax-Rate Dividends

Constant

Tax-Rate Cap-Gains

Constant

This model is a BETA-version!

It may not be fully tested and its features may change in the future.
If you have great ideas for improving this model then please contact us.

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