Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Cintas Corp., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
A consistent upward trajectory is observed in core profitability metrics from 2019 to 2024, characterized by a sustained expansion after a marginal contraction in the 2020 fiscal year. EBITDA exhibits a strong growth pattern, increasing from 1,564,228 thousand US dollars in 2019 to 2,516,759 thousand US dollars by May 31, 2024.
- EBITDA Growth Trends
- Following a slight decline of approximately 1.37% between 2019 and 2020, EBITDA entered a period of accelerated growth. The most significant year-over-year increase occurred between 2023 and 2024, with a growth rate of approximately 13.7%.
- Net Income and EBT Progression
- Net income and Earnings before tax (EBT) mirror the trend observed in EBITDA, reflecting a brief dip in 2020 followed by steady annual gains. Net income rose from 884,981 thousand US dollars in 2019 to 1,571,592 thousand US dollars in 2024, representing a total increase of approximately 77.5% over the analyzed period.
- Depreciation and Amortization Analysis
- The spread between EBITDA and EBIT has widened consistently, indicating an increase in non-cash expenses. This difference grew from 360,093 thousand US dollars in 2019 to 442,384 thousand US dollars in 2024, which suggests an expansion of the company's asset base or increased capital investment.
- Profitability Correlation
- The synchronized growth across EBIT, EBT, and Net Income suggests that the increase in EBITDA is translating effectively into bottom-line earnings, with the scaling of operational profits outpacing the growth of interest and tax obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Enterprise Value to EBITDA Ratio, Current
Cintas Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 79,876,250) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,516,759) |
| Valuation Ratio | |
| EV/EBITDA | 31.74 |
| Benchmarks | |
| EV/EBITDA, Industry | |
| Industrials | 19.74 |
Based on: 10-K (reporting date: 2024-05-31).
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
Cintas Corp., historical EV/EBITDA calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 78,197,934 ÷ 2,516,759 = 31.07
Between May 31, 2019, and May 31, 2024, a consistent expansion in both the absolute Enterprise Value and the EV/EBITDA valuation multiple is observed. While operating performance improved steadily, the market valuation grew at a significantly accelerated pace, resulting in a higher multiple over the six-year period.
- Enterprise Value (EV) Growth
- The Enterprise Value exhibited a continuous upward trajectory, rising from 29,571,934 thousand US dollars in 2019 to 78,197,934 thousand US dollars in 2024. This represents a total increase of approximately 164%. A notable acceleration occurred in the final fiscal year, where the value jumped by nearly 24.5 billion US dollars, the largest single-year increase in the period analyzed.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization grew from 1,564,228 thousand US dollars in 2019 to 2,516,759 thousand US dollars in 2024. Aside from a marginal decline in 2020, EBITDA maintained a steady growth pattern. The total increase over the period was approximately 61%, indicating a healthy growth in core operational profitability, though this growth rate trailed the increase in Enterprise Value.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio expanded from 18.91 in 2019 to 31.07 in 2024. The ratio remained relatively stable between 22.07 and 24.26 from 2020 through 2023, before experiencing a sharp increase to 31.07 in 2024. This divergence suggests that the increase in Enterprise Value was driven more by multiple expansion—reflecting higher market expectations or increased investor confidence—than by the proportional growth of EBITDA.
The data indicates a shift in valuation dynamics, particularly in the most recent fiscal year. The widening gap between the growth of operational earnings and the growth of Enterprise Value suggests that the market is assigning a significantly higher premium to the company's earnings than it did in previous years.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?