Ulta Beauty / High Earnings Growth 5Y

Present Value of Stock using Terminal Values (Model PV‑STK‑TV)

@SimSim 7 months ago

This model simulates the Present Value (PV) of a company to long-term shareholders, where the excess cash and all future earnings are assumed to be paid out as dividends. The model also simulates the Net Present Value (NPV) and NPV Ratio.

This model does NOT simulate future share-prices. Instead the simulated earnings for the final year are assumed to grow forever so they are used to calculate Terminal Values. If you want to simulate future share-prices, then you should use another model instead.

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Keywords: DEMO ULTA

Intrinsic value is Present Value of following earnings:

  • Earnings Y1 = Net Profit Margin (2014-2023) x Sales (2023)
  • Earnings Y2 = Earnings Y1 x Sales Growth (2009-2020)
  • Earnings Y3 = Earnings Y2 x 1.15 (i.e. 15% growth)
  • Earnings Y4 = Earnings Y3 x 1.15
  • Earnings Y5 = Earnings Y4 x 1.15
  • Terminal Growth-Rate = 5% mean, 0.5% std.dev.
  • Discount Rate = 10% mean, 1% std.dev.
  • Warning: Funding of the future growth has not been subtracted from the earnings, so the Present Value is likely over-estimated!

This plot shows the probability distributions that are common for all simulation years.
This plot shows the probability distributions for individual simulation years.
  • This plot shows the simulated Present Value.
  • >99.9% of 100k simulation trials had valid results. Outliers >10.0 IQR are removed.
  • This plot shows the simulated Net Present Value, when the current share-price is USD 370.
  • >99.9% of 100k simulation trials had valid results. Outliers >10.0 IQR are removed.
  • This plot shows the simulated Net Present Value Ratio, when the current share-price is USD 370.
  • >99.9% of 100k simulation trials had valid results. Outliers >10.0 IQR are removed.
  • This plot shows how different share-prices would impact the Net Present Value.
  • >99.9% of 100k simulation trials had valid results. Outliers >10.0 IQR are removed.
  • The x-axis shows a range of share-prices around the current share-price of USD 370, which is marked as a dashed blue line.
  • The red box at the bottom shows the probability of loss if the current share-price is USD 370.
  • This plot shows how different share-prices would impact the Net Present Value Ratio.
  • >99.9% of 100k simulation trials had valid results. Outliers >10.0 IQR are removed.
  • The x-axis shows a range of share-prices around the current share-price of USD 370, which is marked as a dashed blue line.
  • The red box at the bottom shows the probability of loss if the current share-price is USD 370.
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