Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Axon Enterprise Inc., EBITDA calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2018-12-31).
A period of significant financial volatility is observed between 2018 and 2022, characterized by a progressive decline in profitability that culminated in a substantial deficit in 2021, followed by a sharp and comprehensive recovery in 2022.
- EBITDA Performance Trends
- Earnings before interest, tax, depreciation, and amortization exhibited a consistent downward trajectory from 2018 to 2020, decreasing from 38,805 thousand US$ to 6,239 thousand US$. This contraction accelerated sharply in 2021, resulting in a negative EBITDA of 122,653 thousand US$. A significant reversal occurred in 2022, with EBITDA surging to 221,387 thousand US$, representing the highest operational cash flow metric within the observed five-year period.
- Net Income and Profitability Correlation
- Net income patterns closely mirror the EBITDA trend, reflecting a transition from profitability in 2018 to deepening losses through 2021. The loss peaked in 2021 at 60,018 thousand US$. The recovery in 2022 was particularly aggressive, with net income reaching 147,139 thousand US$, indicating that the operational improvements captured in EBITDA translated effectively to the bottom line.
- Operational Expense and Depreciation Analysis
- The divergence between EBIT and EBITDA provides insight into non-cash charges. In 2022, the variance reached its widest point, with EBITDA exceeding EBIT by 24,381 thousand US$, suggesting an increase in depreciation and amortization expenses typically associated with scaling infrastructure or capital investment. The close proximity of EBT and EBIT figures across the period suggests that interest expenses had a minimal impact on the overall earnings trajectory compared to operational fluctuations.
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Enterprise Value to EBITDA Ratio, Current
Axon Enterprise Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 16,462,372) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 221,387) |
| Valuation Ratio | |
| EV/EBITDA | 74.36 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | 23.39 |
| Caterpillar Inc. | 26.96 |
| Eaton Corp. plc | 28.40 |
| GE Aerospace | 27.15 |
| Honeywell International Inc. | 10.78 |
| Lockheed Martin Corp. | 15.34 |
| RTX Corp. | 18.67 |
| EV/EBITDA, Sector | |
| Capital Goods | 31.31 |
| EV/EBITDA, Industry | |
| Industrials | 24.27 |
Based on: 10-K (reporting date: 2022-12-31).
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
Axon Enterprise Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 14,294,307) | 9,071,780) | 9,993,624) | 4,254,913) | 2,914,981) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 221,387) | (122,653) | 6,239) | 13,477) | 38,805) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 64.57 | — | 1,601.80 | 315.72 | 75.12 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 13.86 | 12.43 | — | — | — | |
| Eaton Corp. plc | 19.18 | 17.06 | — | — | — | |
| GE Aerospace | 14.82 | 95.57 | — | — | — | |
| Honeywell International Inc. | 18.01 | 15.57 | — | — | — | |
| Lockheed Martin Corp. | 14.98 | 11.97 | — | — | — | |
| RTX Corp. | 14.92 | 15.48 | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Capital Goods | 19.01 | 19.87 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Industrials | 16.46 | 16.30 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 14,294,307 ÷ 221,387 = 64.57
4 Click competitor name to see calculations.
The financial trajectory from 2018 to 2022 is characterized by a substantial increase in enterprise value coupled with significant volatility in operational earnings, leading to extreme fluctuations in the valuation multiple.
- Enterprise Value Growth
- A consistent upward trend in enterprise value is observed, rising from 2,914,981 thousand US$ in 2018 to 14,294,307 thousand US$ by 2022. The most pronounced increase occurred between 2019 and 2020, where the value more than doubled, indicating a period of rapid market capitalization growth or increased debt levels.
- EBITDA Volatility
- Operational profitability exhibited a downward trend in the early period, declining from 38,805 thousand US$ in 2018 to a trough of negative 122,653 thousand US$ in 2021. However, a significant recovery is noted in 2022, with EBITDA surging to 221,387 thousand US$, the highest level within the five-year period analyzed.
- EV/EBITDA Multiple Analysis
- The EV/EBITDA ratio experienced an exponential increase from 75.12 in 2018 to 1,601.80 in 2020, driven by the simultaneous rise in enterprise value and the contraction of EBITDA. The ratio became mathematically undefined in 2021 due to negative EBITDA. By 2022, the ratio normalized to 64.57, suggesting that the surge in operational earnings aligned more closely with the company's market valuation.
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