Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
DexCom 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).
The financial data indicates a significant turnaround in profitability from 2018 to 2022. Initially, the company experienced a substantial net loss in 2018, with a negative net income of -$127.1 million. However, starting in 2019, the net income became positive and showed a consistent upward trend, reaching $341.2 million by 2022. This suggests improving operational performance and profitability over the five-year period.
Earnings before tax (EBT) followed a similar trajectory, moving from a loss of -$126.5 million in 2018 to positive earnings, culminating at $390.8 million in 2022. This growth in EBT aligns closely with the net income trend, reflecting improved earnings before tax obligations and demonstrating enhanced overall profitability before the impact of income taxes.
The earnings before interest and tax (EBIT) also exhibited strong growth. In 2018, EBIT was negative at -$103.8 million but increased considerably to $409.4 million by 2022. The EBIT values indicate that operating income has recovered robustly, with the company generating positive earnings from its core business operations starting in 2019 and increasing steadily with some acceleration after 2020.
Looking at EBITDA, which adds back depreciation and amortization to EBIT, the trend is similarly positive. The company moved from a negative EBITDA of -$74.7 million in 2018 to $565.3 million in 2022. This substantial increase implies improving cash-generating ability from operational activities before non-cash expenses, highlighting enhanced operational efficiency and potentially better asset utilization over time.
The overall trend in these financial metrics demonstrates a transition from losses in 2018 to strong and consistent profitability and cash flow generation in subsequent years, with especially notable gains after 2019. The steady increases in EBT, EBIT, and EBITDA alongside net income suggest improved cost management, revenue growth, or a combination of both, contributing positively to the company’s financial health.
- Net Income (Loss)
- Shifted from a significant loss in 2018 to positive and increasing profitability by 2022.
- Earnings Before Tax (EBT)
- Transformed from negative earnings to robust positive earnings, mirroring net income progression.
- Earnings Before Interest and Tax (EBIT)
- Revealed operational recovery and growth, moving from negative to substantial positive operating income.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- Improved markedly, reflecting enhanced cash flow generation and operational efficiency.
Enterprise Value to EBITDA Ratio, Current
DexCom Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 30,908,961) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 565,300) |
| Valuation Ratio | |
| EV/EBITDA | 54.68 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Abbott Laboratories | 22.16 |
| Elevance Health Inc. | 6.38 |
| Intuitive Surgical Inc. | 50.16 |
| Medtronic PLC | 15.23 |
| UnitedHealth Group Inc. | 13.27 |
| EV/EBITDA, Sector | |
| Health Care Equipment & Services | 14.45 |
| EV/EBITDA, Industry | |
| Health Care | 14.89 |
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
DexCom 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 | 41,016,904) | 38,537,513) | 38,474,254) | 22,641,443) | 12,793,858) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 565,300) | 376,200) | 376,800) | 213,200) | (74,700) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 72.56 | 102.44 | 102.11 | 106.20 | — | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Abbott Laboratories | 15.85 | 17.42 | 25.99 | — | — | |
| Elevance Health Inc. | 10.26 | 10.05 | 7.57 | — | — | |
| Intuitive Surgical Inc. | 41.52 | 44.54 | 59.12 | — | — | |
| Medtronic PLC | 14.99 | 24.41 | 17.92 | — | — | |
| UnitedHealth Group Inc. | 15.11 | 17.39 | 13.39 | — | — | |
| EV/EBITDA, Sector | ||||||
| Health Care Equipment & Services | 15.27 | 18.06 | 16.63 | — | — | |
| EV/EBITDA, Industry | ||||||
| Health Care | 14.00 | 14.33 | 18.21 | — | — | |
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
= 41,016,904 ÷ 565,300 = 72.56
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a continuous upward trend over the five-year period. Beginning at approximately 12.8 billion USD at the end of 2018, it nearly doubled to about 22.6 billion USD by the end of 2019 and then increased significantly to 38.5 billion USD in 2020. The value remained relatively stable between 2020 and 2021, showing a marginal increase, followed by a moderate rise to approximately 41.0 billion USD by the end of 2022. This pattern indicates substantial growth in the company's overall valuation, especially notable from 2018 to 2020, with slower growth thereafter.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- The EBITDA figure showed a remarkable improvement from a negative value of roughly -74.7 million USD at the end of 2018 to a positive 213.2 million USD in 2019. This positive trajectory continued with EBITDA increasing to approximately 376.8 million USD in 2020 and remaining relatively stable in 2021 at around 376.2 million USD. The upward momentum resumed strongly in 2022 with EBITDA reaching 565.3 million USD. This progression reflects a significant improvement in operational profitability, with the company moving from negative cash earnings to solid positive EBITDA within one year and sustaining this level with growth in the final year.
- EV/EBITDA Ratio
- The EV/EBITDA ratio was not available for 2018, likely due to the negative EBITDA that year, but data from 2019 onwards shows a decline in the ratio, indicating improving valuation efficiency relative to earnings. The ratio stood very high in 2019 at approximately 106.2, decreasing marginally to around 102.1 in 2020 and remaining stable at 102.4 in 2021. A more noticeable decline was observed in 2022, with the ratio dropping to about 72.6. This trend suggests that while enterprise value increased, EBITDA growth outpaced EV growth in later years, leading to a more favorable valuation multiple and possibly indicating increased investor confidence in the company's earnings capability.