Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Etsy Inc., EBITDA calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2017-12-31).
The financial performance indicators demonstrate a consistent upward trend in profitability over the five-year period analyzed. Net income experienced significant growth, starting at 81,800 thousand US dollars in 2017 and reaching 493,507 thousand US dollars by 2021. This represents an overall increase of approximately 503%, indicating substantial improvement in earnings capacity.
Earnings before tax (EBT) followed a similar trajectory, increasing from 32,265 thousand US dollars in 2017 to 471,654 thousand US dollars in 2021. This rise reflects enhanced operational efficiency and potentially improved revenue streams before accounting for tax expenses.
The earnings before interest and tax (EBIT) figures reveal strong growth as well, advancing from 43,395 thousand US dollars in 2017 to 481,539 thousand US dollars in 2021. This suggests the company's operating profitability has expanded markedly over the period.
EBITDA, which includes adjustments for depreciation and amortization, further confirms the robust performance, increasing from 70,592 thousand US dollars in 2017 to 555,806 thousand US dollars in 2021. This increase points to strong cash generation capabilities from core business operations.
- Summary of Trends:
- - All key profitability metrics show consistent and substantial growth from 2017 to 2021.
- - Net income increased more than sixfold, indicating improved bottom-line profitability.
- - EBT and EBIT figures parallel the growth in net income, demonstrating improved operational and pre-tax earnings.
- - EBITDA growth confirms enhanced cash flow generation capacity.
- - The most notable jump occurs between 2019 and 2020, where all metrics approximately triple or more, suggesting a significant business expansion or operational improvement during that year.
In conclusion, the financial data reveal a strong and accelerating improvement in profitability and operational performance over the five years under review, with particularly pronounced growth starting in 2020 and continuing through 2021.
Enterprise Value to EBITDA Ratio, Current
Etsy Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 13,976,109) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 555,806) |
| Valuation Ratio | |
| EV/EBITDA | 25.15 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Amazon.com Inc. | 18.16 |
| Home Depot Inc. | 16.62 |
| Lowe’s Cos. Inc. | 12.72 |
| TJX Cos. Inc. | 18.02 |
| EV/EBITDA, Sector | |
| Consumer Discretionary Distribution & Retail | 27.57 |
| EV/EBITDA, Industry | |
| Consumer Discretionary | 61.29 |
Based on: 10-K (reporting date: 2021-12-31).
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
Etsy Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 20,323,794) | 27,211,471) | 6,861,370) | 8,239,666) | 2,805,862) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 555,806) | 465,923) | 152,997) | 103,998) | 70,592) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 36.57 | 58.40 | 44.85 | 79.23 | 39.75 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Amazon.com Inc. | 21.27 | 32.24 | — | — | — | |
| Home Depot Inc. | 16.53 | 12.34 | — | — | — | |
| Lowe’s Cos. Inc. | 14.41 | 8.98 | — | — | — | |
| TJX Cos. Inc. | 65.35 | 10.33 | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 20.16 | 24.23 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Consumer Discretionary | 21.51 | 29.73 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/EBITDA = EV ÷ EBITDA
= 20,323,794 ÷ 555,806 = 36.57
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited notable fluctuations over the observed period. It increased significantly from approximately 2.81 billion USD at the end of 2017 to a peak of about 27.21 billion USD at the end of 2020. However, a marked decline followed in 2021, with EV decreasing to roughly 20.32 billion USD. This pattern indicates phases of market revaluation or changes in company valuation drivers during these years.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA demonstrated a consistent upward trend throughout the time frame. Starting at about 70.6 million USD in 2017, it rose steadily each year, reaching 555.8 million USD by the end of 2021. The largest year-over-year increase occurred between 2019 and 2020, where EBITDA more than tripled, indicating significant operational performance improvements or scalability effects.
- EV/EBITDA Ratio
- The EV/EBITDA ratio showed considerable volatility but an overall tendency to decrease by the end of the period. Beginning at a high valuation multiple of 39.75 in 2017, the ratio peaked at 79.23 in 2018, suggesting elevated market expectations or relatively lower EBITDA at that time. Subsequently, it declined to 36.57 in 2021, reflecting the combination of increasing EBITDA and a reduction in enterprise value. This decline could imply improved earnings quality or a market adjustment to more reasonable valuation levels.