Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Abiomed Inc., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
An analysis of the financial performance from 2017 to 2022 reveals a period of aggressive operational expansion followed by a recent contraction in earnings capacity. The trajectory of operational profitability indicates a strong growth phase that peaked in 2021 before experiencing a significant downturn in 2022.
- EBITDA Growth and Volatility
- Earnings before interest, tax, depreciation and amortization exhibited a substantial upward trajectory between 2017 and 2019, rising from 97,899 thousand US$ to 277,481 thousand US$. This growth plateaued in 2020 and reached a maximum of 312,317 thousand US$ in 2021. A sharp reversal occurred in 2022, with EBITDA declining to 218,649 thousand US$, representing a contraction of approximately 30% from the 2021 peak.
- Depreciation and Amortization Trends
- A consistent widening of the margin between EBIT and EBITDA is observed throughout the period. The difference, which accounts for depreciation and amortization, increased steadily from 6,202 thousand US$ in 2017 to 28,089 thousand US$ in 2022. This persistent increase suggests a sustained growth in the company's asset base or an increase in capital expenditures over the observed timeframe.
- Profitability and Net Income Correlation
- Net income movements generally align with EBITDA trends, although the correlation is less stable. For instance, while EBITDA remained nearly flat between 2019 and 2020, net income declined from 259,016 thousand US$ to 203,009 thousand US$. In 2022, a synchronized decline is evident across all profitability metrics, with net income falling to 136,505 thousand US$, indicating a broad compression of both operating results and final bottom-line earnings.
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Enterprise Value to EBITDA Ratio, Current
Abiomed Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 16,088,812) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 218,649) |
| Valuation Ratio | |
| EV/EBITDA | 73.58 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Abbott Laboratories | 16.14 |
| Elevance Health Inc. | 9.12 |
| Intuitive Surgical Inc. | 37.89 |
| Medtronic PLC | 15.25 |
| UnitedHealth Group Inc. | 17.75 |
| EV/EBITDA, Sector | |
| Health Care Equipment & Services | 14.73 |
| EV/EBITDA, Industry | |
| Health Care | 20.63 |
Based on: 10-K (reporting date: 2022-03-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Abiomed Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 9,983,091) | 12,099,179) | 8,382,834) | 11,359,861) | 17,182,479) | 5,740,561) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 218,649) | 312,317) | 277,255) | 277,481) | 171,744) | 97,899) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 45.66 | 38.74 | 30.24 | 40.94 | 100.05 | 58.64 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Abbott Laboratories | 15.85 | 17.42 | — | — | — | — | |
| Elevance Health Inc. | 10.26 | 10.05 | — | — | — | — | |
| Intuitive Surgical Inc. | 40.96 | 44.10 | — | — | — | — | |
| Medtronic PLC | 14.99 | 24.41 | — | — | — | — | |
| UnitedHealth Group Inc. | 15.11 | 17.39 | — | — | — | — | |
| EV/EBITDA, Sector | |||||||
| Health Care Equipment & Services | 15.26 | 18.05 | — | — | — | — | |
| EV/EBITDA, Industry | |||||||
| Health Care | 14.00 | 14.33 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 9,983,091 ÷ 218,649 = 45.66
4 Click competitor name to see calculations.
The financial trajectory from 2017 to 2022 is characterized by significant volatility in enterprise valuation contrasted with a generally positive growth trend in operational earnings, leading to substantial fluctuations in the EV/EBITDA multiple.
- Enterprise Value (EV) Trends
- A sharp increase in enterprise value occurred between 2017 and 2018, rising from approximately 5.74 billion to 17.18 billion. This was followed by a period of contraction through 2020, reaching a low of 8.38 billion, before experiencing a recovery in 2021 and a subsequent moderate decline to 9.98 billion in 2022.
- EBITDA Growth Profile
- Earnings before interest, tax, depreciation, and amortization demonstrated a consistent upward trajectory for the majority of the period. EBITDA grew from 97.9 million in 2017 to a peak of 312.3 million in 2021. A reversal in this trend occurred in 2022, with earnings decreasing to 218.6 million.
- EV/EBITDA Ratio Analysis
- The valuation multiple exhibited extreme volatility, peaking at 100.05 in 2018, indicating a period where market valuation far exceeded operational earnings growth. A significant correction followed, with the ratio dropping to 40.94 in 2019 and reaching a low of 30.24 in 2020. This compression was driven by the simultaneous decrease in enterprise value and the increase in EBITDA. Between 2021 and 2022, the ratio trended upward again to 45.66, reflecting the impact of declining EBITDA in the final year of the analysis.
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