Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
American Airlines Group Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial trajectory from 2019 to 2023 is characterized by a severe contraction in 2020 followed by a consistent, multi-year recovery phase. All profitability metrics exhibit a V-shaped recovery, with the most recent figures approaching or mirroring pre-2020 levels.
- EBITDA Performance
- EBITDA experienced an extreme decline from US$ 5,669 million in 2019 to a deficit of US$ 7,856 million in 2020. This metric demonstrated the fastest return to positive territory among all measured items, recording US$ 1,587 million in 2021. The subsequent growth trend continued through 2022 and 2023, with the 2023 value of US$ 5,520 million nearly approximating the 2019 baseline.
- Operating and Pre-tax Earnings
- Earnings before interest and tax (EBIT) and earnings before tax (EBT) followed a similar recovery path. EBIT recovered from a significant loss of US$ 10,226 million in 2020 to US$ 3,266 million in 2023, effectively restoring operating profit to levels seen in 2019 (US$ 3,351 million). EBT similarly moved from a deficit of US$ 11,453 million in 2020 to a positive US$ 1,121 million by the end of 2023.
- Net Income Recovery
- Net income demonstrated the most prolonged recovery period and the greatest lag in returning to profitability. Following a loss of US$ 8,885 million in 2020, the company remained in a net loss position through 2021. While profitability returned in 2022 with a modest US$ 127 million and increased to US$ 822 million in 2023, the bottom line remains significantly below the 2019 net income of US$ 1,686 million.
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Enterprise Value to EBITDA Ratio, Current
American Airlines Group Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 34,098) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 5,520) |
| Valuation Ratio | |
| EV/EBITDA | 6.18 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| FedEx Corp. | 7.85 |
| Uber Technologies Inc. | 20.74 |
| Union Pacific Corp. | 16.02 |
| United Airlines Holdings Inc. | 5.78 |
| United Parcel Service Inc. | 9.45 |
| EV/EBITDA, Sector | |
| Transportation | 13.09 |
| EV/EBITDA, Industry | |
| Industrials | 18.32 |
Based on: 10-K (reporting date: 2023-12-31).
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
American Airlines Group Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 34,098) | 35,839) | 35,954) | 36,628) | 32,401) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 5,520) | 4,446) | 1,587) | (7,856) | 5,669) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 6.18 | 8.06 | 22.66 | — | 5.72 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| FedEx Corp. | 7.59 | 7.33 | 8.22 | — | — | |
| Uber Technologies Inc. | 45.37 | — | 227.40 | — | — | |
| Union Pacific Corp. | 15.44 | 12.55 | 15.46 | — | — | |
| United Airlines Holdings Inc. | 4.11 | 6.23 | 21.49 | — | — | |
| United Parcel Service Inc. | 11.46 | 8.94 | 9.56 | — | — | |
| EV/EBITDA, Sector | ||||||
| Transportation | 13.18 | 13.14 | 12.73 | — | — | |
| EV/EBITDA, Industry | ||||||
| Industrials | 14.85 | 16.46 | 16.30 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 34,098 ÷ 5,520 = 6.18
4 Click competitor name to see calculations.
The financial trajectory between 2019 and 2023 is characterized by a period of severe operational disruption followed by a steady recovery toward pre-crisis levels. While the enterprise value remained relatively stable throughout the period, the volatility in operational earnings led to significant fluctuations in the valuation multiple.
- Enterprise Value Stability
- Enterprise value exhibited a moderate increase from 32,401 million USD in 2019 to a peak of 36,628 million USD in 2020. Following this peak, the value experienced a gradual decline, closing at 34,098 million USD by the end of 2023. This indicates that the overall market valuation of the company's core operations and debt remained within a consistent range despite extreme volatility in profitability.
- EBITDA Volatility and Recovery
- Earnings before interest, tax, depreciation and amortization showed a dramatic collapse in 2020, falling from 5,669 million USD in 2019 to a negative 7,856 million USD. A consistent upward recovery trend followed, with EBITDA rising to 1,587 million USD in 2021, 4,446 million USD in 2022, and reaching 5,520 million USD in 2023. By the end of the analyzed period, operational earnings had nearly returned to 2019 levels.
- EV/EBITDA Ratio Normalization
- The EV/EBITDA ratio reflects the impact of the EBITDA swing. The ratio was not applicable in 2020 due to negative earnings. In 2021, the ratio spiked to 22.66, reflecting a high valuation relative to the initial stages of earnings recovery. As EBITDA strengthened, the ratio declined sharply to 8.06 in 2022 and further to 6.18 in 2023. This downward trend suggests a normalization of the valuation multiple as the company regained its operational capacity.
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