Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Dollar Tree Inc., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The financial performance between 2017 and 2022 is characterized by a period of initial expansion, a severe contraction in 2019, and a subsequent recovery leading to a plateau in profitability.
- EBITDA Performance Trends
- Earnings before interest, tax, depreciation, and amortization exhibited a growth trajectory from 2.34 billion in 2017 to 2.62 billion in 2018. This was followed by a significant downturn in 2019, where the figure turned negative at 317.9 million. A strong recovery was observed in 2020, with EBITDA rising to 1.91 billion, eventually reaching 2.57 billion in 2021 before stabilizing at 2.53 billion in 2022.
- Operational Profitability and Net Income
- The volatility in EBITDA is closely mirrored in Earnings before interest and tax (EBIT) and Net Income. The 2019 fiscal year represents a significant anomaly, with Net Income falling to negative 1.59 billion and EBIT dropping to negative 939 million. The subsequent years demonstrate a return to profitability, with Net Income recovering to 827 million in 2020 and peaking at 1.34 billion in 2021.
- Analysis of Depreciation and Amortization
- The delta between EBITDA and EBIT indicates a consistent expenditure on depreciation and amortization. This value remained relatively stable throughout the period, ranging from approximately 611 million to 716 million. A slight upward trend in these non-cash charges is observed toward the end of the period, suggesting continued investment in fixed assets despite the operational volatility experienced in 2019.
- Overall Financial Trajectory
- The data suggests a resilient recovery pattern. Following the 2019 deficit, the company restored its earnings capacity to levels nearly equivalent to the 2018 peak. By 2022, the convergence of EBITDA and Net Income figures suggests a period of stabilization in operational efficiency.
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Enterprise Value to EBITDA Ratio, Current
Dollar Tree Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 36,133,978) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,527,100) |
| Valuation Ratio | |
| EV/EBITDA | 14.30 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Costco Wholesale Corp. | 30.07 |
| Target Corp. | 9.94 |
| Walmart Inc. | 22.44 |
| EV/EBITDA, Sector | |
| Consumer Staples Distribution & Retail | 29.62 |
| EV/EBITDA, Industry | |
| Consumer Staples | 25.56 |
Based on: 10-K (reporting date: 2022-01-29).
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
Dollar Tree Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 36,437,266) | 27,261,718) | 21,223,520) | 28,668,857) | 27,305,122) | 23,540,007) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,527,100) | 2,573,700) | 1,906,200) | (317,900) | 2,617,000) | 2,342,400) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 14.42 | 10.59 | 11.13 | — | 10.43 | 10.05 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Costco Wholesale Corp. | 21.19 | 22.64 | — | — | — | — | |
| Target Corp. | 9.00 | 10.35 | — | — | — | — | |
| Walmart Inc. | 13.94 | 12.01 | — | — | — | — | |
| EV/EBITDA, Sector | |||||||
| Consumer Staples Distribution & Retail | 14.18 | 13.50 | — | — | — | — | |
| EV/EBITDA, Industry | |||||||
| Consumer Staples | 16.42 | 15.65 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 36,437,266 ÷ 2,527,100 = 14.42
4 Click competitor name to see calculations.
The financial trajectory from 2017 to 2022 reflects a period of volatility in earnings paired with a significant expansion in overall enterprise valuation. While the valuation multiple remained relatively consistent for the majority of the period, a sharp increase occurred in the final year, indicating a decoupling of market value from operational earnings.
- Enterprise Value (EV) Trends
- Enterprise value exhibited an overall upward trend, increasing from approximately 23.5 billion USD in 2017 to a peak of 36.4 billion USD in 2022. A notable contraction occurred in 2020, where value dipped to 21.2 billion USD, before recovering strongly over the following two fiscal years.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization remained generally stable between 2.3 billion USD and 2.6 billion USD, with the exception of a significant anomaly in 2019. During that period, EBITDA turned negative at -317.9 million USD, which disrupted the continuity of the valuation ratio. Recovery was evident by 2020, with earnings returning to positive territory and stabilizing near 2.5 billion USD by 2022.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio stayed within a narrow range of 10.05 to 11.13 between 2017 and 2021. However, 2022 saw a substantial expansion of this multiple to 14.42. This increase is attributed to a sharp rise in enterprise value that was not matched by a corresponding increase in EBITDA, which actually saw a slight decline from the previous year. This suggests a higher market premium was applied to the company's valuation in 2022 despite stagnant operational cash flow.
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