Microsoft Excel LibreOffice Calc

Amgen Inc. (AMGN)

Enterprise Value to EBITDA (EV/EBITDA)

Difficulty: Intermediate

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

Amgen Inc., EBITDA calculation

US$ in millions

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income 8,394  1,979  7,722  6,939  5,158 
Add: Income tax expense 1,151  7,618  1,441  1,039  427 
Earnings before tax (EBT) 9,545  9,597  9,163  7,978  5,585 
Add: Interest expense, net 1,392  1,304  1,260  1,095  1,071 
Earnings before interest and tax (EBIT) 10,937  10,901  10,423  9,073  6,656 
Add: Depreciation and amortization 1,946  1,955  2,105  2,108  2,092 
Earnings before interest, tax, depreciation and amortization (EBITDA) 12,883  12,856  12,528  11,181  8,748 

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19).

Item Description The company
EBITDA To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. Amgen Inc.’s EBITDA increased from 2016 to 2017 and from 2017 to 2018.

Enterprise Value to EBITDA Ratio, Current

Amgen Inc., current EV/EBITDA calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 125,045 
Earnings before interest, tax, depreciation and amortization (EBITDA) 12,883 
Valuation Ratio
EV/EBITDA 9.71
Benchmarks
EV/EBITDA, Competitors1
Abbott Laboratories 22.42
AbbVie Inc. 16.98
Allergan PLC 96.37
Biogen Inc. 6.12
Bristol-Myers Squibb Co. 12.22
Celgene Corp. 13.77
Eli Lilly & Co. 19.44
Gilead Sciences Inc. 7.61
Johnson & Johnson 13.78
Merck & Co. Inc. 16.61
Pfizer Inc. 11.39
Regeneron Pharmaceuticals Inc. 11.33
EV/EBITDA, Sector
Pharmaceuticals & Biotechnology 13.70
EV/EBITDA, Industry
Health Care 14.59

Based on: 10-K (filing date: 2019-02-13).

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

Amgen Inc., historical EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 122,223  120,440  120,272  110,844  122,109 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 12,883  12,856  12,528  11,181  8,748 
Valuation Ratio
EV/EBITDA3 9.49 9.37 9.60 9.91 13.96
Benchmarks
EV/EBITDA, Competitors4
Abbott Laboratories 21.41 20.08 25.22 12.40 17.78
AbbVie Inc. 17.98 20.80 12.73 13.50 29.11
Allergan PLC 84.90 — 20.95 59.52 59.49
Biogen Inc. 9.55 11.68 9.99 11.42 19.47
Bristol-Myers Squibb Co. 11.97 17.25 14.26 39.09 32.88
Celgene Corp. 12.44 14.20 28.50 31.19 34.11
Eli Lilly & Co. 23.29 22.72 18.40 19.15 18.17
Gilead Sciences Inc. 7.83 7.11 5.57 5.56 9.70
Johnson & Johnson 14.42 15.04 13.07 11.54 10.63
Merck & Co. Inc. 16.05 13.74 17.75 12.35 6.96
Pfizer Inc. 13.48 11.92 14.86 13.02 11.04
Regeneron Pharmaceuticals Inc. 15.50 15.13 26.10 28.77 47.11
EV/EBITDA, Sector
Pharmaceuticals & Biotechnology 14.40 14.59 13.50 13.31 13.52
EV/EBITDA, Industry
Health Care 15.05 15.15 13.79 13.64 13.34

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19).

1 See details »

2 See details »

3 2018 Calculation
EV/EBITDA = EV ÷ EBITDA
= 122,223 ÷ 12,883 = 9.49

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/EBITDA Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock. Amgen Inc.’s EV/EBITDA ratio declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.