Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Fiserv Inc., EBITDA calculation
US$ in millions
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 analysis of the financial data reveals several noteworthy trends across the period from 2017 to 2021. Overall profitability measures exhibit fluctuations but indicate a positive trajectory in the later years.
- Net Income Attributable to Fiserv, Inc.
- Net income showed a decline from $1,246 million in 2017 to $893 million in 2019, representing a considerable decrease over two years. However, this trend reversed starting in 2020, with net income rising to $958 million and substantially increasing to $1,334 million in 2021, marking the highest value within the observed timeframe.
- Earnings Before Tax (EBT)
- EBT experienced growth from $1,390 million in 2017 to a peak of $1,565 million in 2018, followed by a decline to $1,112 million in 2019. Similar to net income, EBT recovered in 2020, reaching $1,171 million, and significantly increased to $1,766 million in 2021, the highest in the period under review. These fluctuations suggest some volatility, but the upward momentum in the final year is notable.
- Earnings Before Interest and Tax (EBIT)
- EBIT moved from $1,566 million in 2017 to $1,758 million in 2018, then moderated to $1,619 million in 2019. The year 2020 marked an increase to $1,887 million, followed by a strong acceleration to $2,462 million in 2021. The consistent growth in the last two years signals improved operational efficiency or revenue growth before accounting for interest and tax expenses.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA displayed a pronounced upward trend throughout the period. Starting at $1,999 million in 2017, it rose steadily each year, notably surging from $2,303 million in 2018 to $3,270 million in 2019. The increase accelerated further in 2020 to $5,097 million, culminating in $5,658 million in 2021. This strong growth in EBITDA suggests substantial improvements in cash operating profitability and possibly reflects effective cost management or enhanced revenue streams not yet fully reflected in net income.
In summary, the data reflect a phase of initial profitability decline followed by a recovery and marked growth, especially from 2019 onwards. EBITDA growth outpaced other profit measures, indicating robust underlying operational performance. The upward trend in net income and EBIT in 2021 suggests that the company has improved both its core operations and bottom-line outcomes after a period of volatility.
Enterprise Value to EBITDA Ratio, Current
Fiserv Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 88,825) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 5,658) |
| Valuation Ratio | |
| EV/EBITDA | 15.70 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | 15.36 |
| Adobe Inc. | 19.09 |
| Cadence Design Systems Inc. | 52.27 |
| CrowdStrike Holdings Inc. | 392.51 |
| Fair Isaac Corp. | 52.08 |
| International Business Machines Corp. | 24.92 |
| Intuit Inc. | 45.97 |
| Microsoft Corp. | 28.15 |
| Oracle Corp. | 30.40 |
| Palantir Technologies Inc. | 634.08 |
| Palo Alto Networks Inc. | 96.36 |
| Salesforce Inc. | 21.61 |
| ServiceNow Inc. | 81.74 |
| Synopsys Inc. | 44.87 |
| Workday Inc. | 50.66 |
| EV/EBITDA, Sector | |
| Software & Services | 45.31 |
| EV/EBITDA, Industry | |
| Information Technology | 41.84 |
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
Fiserv 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 millions) | ||||||
| Enterprise value (EV)1 | 83,446) | 97,754) | 96,331) | 38,731) | 33,938) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 5,658) | 5,097) | 3,270) | 2,303) | 1,999) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 14.75 | 19.18 | 29.46 | 16.82 | 16.98 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Accenture PLC | 23.31 | 17.46 | 15.60 | — | — | |
| Adobe Inc. | 35.44 | 43.06 | 41.16 | — | — | |
| Cadence Design Systems Inc. | 39.61 | 45.75 | — | — | — | |
| CrowdStrike Holdings Inc. | — | — | — | — | — | |
| Fair Isaac Corp. | 21.71 | 42.84 | 35.93 | — | — | |
| International Business Machines Corp. | 12.53 | 12.28 | — | — | — | |
| Intuit Inc. | 51.96 | 35.70 | 34.27 | — | — | |
| Microsoft Corp. | 24.59 | 21.74 | 17.21 | — | — | |
| Oracle Corp. | 13.78 | 11.54 | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | 349.99 | 117.18 | — | — | |
| Salesforce Inc. | 33.83 | 49.45 | — | — | — | |
| ServiceNow Inc. | 147.45 | 220.91 | — | — | — | |
| Synopsys Inc. | 53.43 | 42.24 | 26.98 | — | — | |
| Workday Inc. | 670.04 | — | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Software & Services | 25.66 | 23.30 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Information Technology | 20.46 | 19.69 | — | — | — | |
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
= 83,446 ÷ 5,658 = 14.75
4 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals notable trends in both enterprise value and earnings performance. Enterprise value (EV) exhibited a general upward trajectory from 2017 through 2019, increasing from approximately $33.9 billion to $96.3 billion, indicating significant growth or acquisition activity during this period. However, EV experienced a marginal increase in 2020 before declining to around $83.4 billion by the end of 2021, suggesting either market revaluation, asset disposals, or other value adjustments in the latter years.
Earnings before interest, tax, depreciation, and amortization (EBITDA) displayed a consistent and marked increase across all recorded years, rising from $2.0 billion in 2017 to $5.7 billion in 2021. This steady growth in EBITDA indicates improving operational profitability and efficiency, reflecting possibly enhanced revenue streams, cost control measures, or both.
The EV/EBITDA ratio varied substantially during the period, starting at around 17.0 in 2017 and remaining at similar levels through 2018. It surged to a peak near 29.5 in 2019, implying that enterprise value grew disproportionately relative to EBITDA in that year, potentially due to market expectations of future growth or significant strategic developments. Subsequently, the ratio declined to approximately 19.2 in 2020 and further to 14.8 in 2021, indicating that EBITDA growth outpaced the enterprise value during these years, which could be interpreted as the business becoming more attractively valued relative to its earnings capacity.
Overall, the data reveals that while enterprise value experienced a surge and then moderate retreat, the underlying earnings performance demonstrated robust, continuous improvement. The contraction in the EV/EBITDA ratio towards the end of the period suggests the company may have reached a phase of greater operational efficiency and market valuation alignment.
- Enterprise Value (EV)
- Increased sharply from 2017 to 2019, plateaued in 2020, and declined in 2021.
- EBITDA
- Consistently increased from 2017 through 2021, more than doubling over the period.
- EV/EBITDA Ratio
- Rose sharply in 2019, then decreased steadily through 2021, indicating relative valuation adjustments.