Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
CoStar Group 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).
- Net Income
- The net income shows a generally positive upward trend from 2018 to 2022. It increased from $238,334 thousand in 2018 to $314,963 thousand in 2019, followed by a decline to $227,128 thousand in 2020. After this dip, net income rebounded notably to $292,564 thousand in 2021 and further increased to $369,453 thousand in 2022, surpassing earlier years.
- Earnings Before Tax (EBT)
- EBT follows a somewhat similar pattern to net income but with more pronounced fluctuations. It rose from $284,015 thousand in 2018 to $390,949 thousand in 2019, then decreased significantly to $270,980 thousand in 2020. The figure recovered sharply in 2021 to $403,968 thousand and continued to climb to $486,457 thousand in 2022, demonstrating strong growth and improved profitability before tax.
- Earnings Before Interest and Tax (EBIT)
- EBIT increased steadily overall during the reviewed period. Starting at $286,845 thousand in 2018, it grew to $393,564 thousand in 2019, dipped slightly to $292,774 thousand in 2020, then rose substantially in 2021 to $436,284 thousand. The upward trend continued into 2022, reaching $518,782 thousand. This indicates enhanced operational efficiency and earnings potential before interest and tax expenses.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA experienced consistent growth over the five years with a minor setback in 2020. It increased from $364,588 thousand in 2018 to $474,729 thousand in 2019, then fell to $409,718 thousand in 2020. Afterward, EBITDA grew robustly to $575,842 thousand in 2021 and reached $656,667 thousand in 2022. This upward trajectory signals improving cash flow generation and overall operating performance.
- Overall Financial Trend Analysis
- The financial data reveals that while CoStar Group Inc. faced a noticeable dip in earnings metrics across 2020, likely due to external factors affecting that fiscal year, it nevertheless demonstrated strong recovery and growth in the subsequent years. Key profitability indicators such as net income, EBT, EBIT, and EBITDA all show significant reinforcement by 2022 compared to 2018, reflecting improved operational outcomes and increasing financial strength over the medium term.
Enterprise Value to EBITDA Ratio, Current
CoStar Group Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 30,476,681) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 656,667) |
| Valuation Ratio | |
| EV/EBITDA | 46.41 |
| Benchmarks | |
| EV/EBITDA, Industry | |
| Industrials | 21.28 |
Based on: 10-K (reporting date: 2022-12-31).
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
CoStar Group Inc., historical EV/EBITDA calculation, comparison to benchmarks
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
= 25,361,735 ÷ 656,667 = 38.62
- Enterprise Value (EV)
- The enterprise value exhibited a notable upward trend from 2018 to 2020, increasing from approximately 15.6 billion to nearly 30.2 billion US dollars. However, there was a pronounced decline in 2021, with EV dropping to around 18.3 billion. In 2022, the value recovered somewhat, rising again to approximately 25.4 billion US dollars. This pattern suggests fluctuations potentially influenced by market conditions or company-specific events.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA showed overall growth during the period under review. Starting at about 365 million US dollars in 2018, it increased significantly to nearly 475 million in 2019. A decline occurred in 2020, falling to around 410 million, before rebounding strongly in the subsequent years, reaching approximately 576 million in 2021 and further improving to about 657 million in 2022. This suggests improved operating profitability in recent years despite a temporary setback in 2020.
- EV/EBITDA Ratio
- The valuation multiple, as measured by the EV/EBITDA ratio, displayed considerable variability. Beginning at 42.72 in 2018, the ratio rose to a peak of 73.67 in 2020, indicating a high valuation relative to earnings EBITDA. Subsequently, the ratio decreased sharply to 31.77 in 2021 and then increased moderately to 38.62 by the end of 2022. The sharp decline in 2021 aligns with the decrease in EV and the increase in EBITDA, suggesting a more attractive valuation that year compared to prior periods.
- Summary of Trends
- Overall, the data indicates that while enterprise value and EBITDA each experienced fluctuations, the latter maintained an upward trend after a temporary decline in 2020. The EV showed volatility with a peak in 2020, a dip in 2021, and a partial recovery in 2022. The EV/EBITDA ratio's sharp rise in 2020 followed by a substantial decrease in 2021 reflects changes in market perception of valuation relative to earnings, leading to comparatively more favorable valuation multiples in recent years.