Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Fortinet 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 Attributable to Fortinet, Inc.
- The net income has shown a consistent and substantial increase over the five-year period. Starting from 332,200 thousand USD in 2018, it grew marginally to 326,500 thousand USD in 2019. From 2019 onwards, the upward trend accelerated, reaching 488,500 thousand USD in 2020, 606,800 thousand USD in 2021, and peaking at 857,300 thousand USD in 2022. This represents a significant overall growth, indicating improved profitability and operational efficiency.
- Earnings Before Tax (EBT)
- The EBT figures also exhibit a strong upward trajectory. Beginning at 250,900 thousand USD in 2018, a marked increase to 379,200 thousand USD occurred in 2019. This growth trend intensified through the subsequent years, with earnings rising to 541,700 thousand USD in 2020, 620,800 thousand USD in 2021, and 887,400 thousand USD in 2022. The consistent increase in EBT suggests improving earnings power before tax expenses.
- Earnings Before Interest and Tax (EBIT)
- The EBIT closely mirrors the trend observed in EBT, starting from 250,900 thousand USD in 2018, rising sharply to 379,200 thousand USD in 2019, and continuing an upward climb to 541,700 thousand USD in 2020, 635,700 thousand USD in 2021, and 905,400 thousand USD in 2022. The slight difference between EBIT and EBT in later years, particularly between 2021 and 2022, may indicate changes in interest expenses or other financial costs.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA figures demonstrate a steady and strong growth pattern. From 306,600 thousand USD in 2018, there was a significant increase to 440,800 thousand USD in 2019. The upward momentum continued, with 610,500 thousand USD recorded in 2020, 720,100 thousand USD in 2021, and reaching 1,009,700 thousand USD in 2022. This growth reflects enhanced cash generation capacity and operational profitability before non-cash charges and financial expenses.
- Overall Insights
- Across all measured financial metrics, there is clear evidence of robust growth over the five-year period. Each key earnings measure – net income, EBT, EBIT, and EBITDA – exhibits continuous annual increases, with particularly notable acceleration from 2019 onward. The patterns imply strengthened profitability, improved efficiency in operations, and growing cash flows. No periods of decline are observed, indicating resilient financial performance and potentially effective management strategies.
Enterprise Value to EBITDA Ratio, Current
Fortinet Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 50,665,163) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 1,009,700) |
| Valuation Ratio | |
| EV/EBITDA | 50.18 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | 13.37 |
| Adobe Inc. | 18.47 |
| AppLovin Corp. | 97.99 |
| Cadence Design Systems Inc. | 52.54 |
| CrowdStrike Holdings Inc. | 419.65 |
| Datadog Inc. | 182.83 |
| International Business Machines Corp. | 27.01 |
| Intuit Inc. | 31.95 |
| Microsoft Corp. | 22.17 |
| Oracle Corp. | 26.17 |
| Palantir Technologies Inc. | 830.30 |
| Palo Alto Networks Inc. | 67.30 |
| Salesforce Inc. | 21.52 |
| ServiceNow Inc. | 75.55 |
| Synopsys Inc. | 43.44 |
| Workday Inc. | 50.10 |
| EV/EBITDA, Sector | |
| Software & Services | 43.49 |
| EV/EBITDA, Industry | |
| Information Technology | 43.47 |
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
Fortinet 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 | 44,929,542) | 50,710,379) | 26,223,379) | 16,264,089) | 13,349,100) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 1,009,700) | 720,100) | 610,500) | 440,800) | 306,600) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 44.50 | 70.42 | 42.95 | 36.90 | 43.54 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Accenture PLC | 14.25 | 23.31 | 17.46 | — | — | |
| Adobe Inc. | 22.32 | 35.44 | 43.06 | 41.16 | — | |
| AppLovin Corp. | 14.17 | 30.05 | — | — | — | |
| Cadence Design Systems Inc. | 42.11 | 39.61 | 45.75 | — | — | |
| CrowdStrike Holdings Inc. | — | — | — | — | — | |
| Datadog Inc. | 1,785.61 | 1,949.67 | 1,224.54 | — | — | |
| International Business Machines Corp. | 22.17 | 12.53 | 12.28 | — | — | |
| Intuit Inc. | 36.22 | 51.96 | 35.70 | — | — | |
| Microsoft Corp. | 20.17 | 24.59 | 21.74 | — | — | |
| Oracle Corp. | 17.12 | 13.78 | 11.54 | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | 515.19 | — | 349.99 | — | — | |
| Salesforce Inc. | 38.88 | 33.83 | 49.45 | — | — | |
| ServiceNow Inc. | 104.30 | 147.45 | 220.91 | — | — | |
| Synopsys Inc. | 36.73 | 53.43 | 42.24 | 26.98 | — | |
| Workday Inc. | 147.90 | 670.04 | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Software & Services | 22.68 | 26.04 | 23.49 | — | — | |
| EV/EBITDA, Industry | ||||||
| Information Technology | 18.33 | 20.59 | 19.76 | — | — | |
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
= 44,929,542 ÷ 1,009,700 = 44.50
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value shows a generally increasing trend from 2018 to 2021, rising from approximately 13.35 billion USD to over 50.71 billion USD. However, in 2022, there is a notable decrease to around 44.93 billion USD, indicating a contraction in market capitalization or changes in the company's debt and cash positions that affect EV.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA exhibits consistent growth throughout the period, starting at 306.6 million USD in 2018 and reaching nearly 1.01 billion USD in 2022. This steady increase suggests improving operational profitability and possibly enhanced efficiency or revenue growth over these years.
- EV/EBITDA Ratio
- The EV/EBITDA multiple fluctuates across the years, reflecting varying relationships between market valuation and earnings. Beginning at a high multiple of 43.54 in 2018, it decreases to 36.9 in 2019, rises again to 42.95 in 2020, sharply increases to 70.42 in 2021, and then declines to 44.5 in 2022. The spike in 2021 indicates a significant market premium relative to EBITDA that year, followed by a partial correction in 2022, which may reflect changing investor sentiment, earnings expectations, or market dynamics.
- Overall Analysis
- The data depict a company with steadily improving operational earnings, as indicated by EBITDA growth. Despite the earnings growth, the enterprise value shows more volatility, particularly with a significant increase and subsequent decrease, suggesting fluctuations in market perception or capital structure adjustments. The EV/EBITDA ratio's volatility demonstrates changing investor valuations of the company's profitability over time, with a peak in 2021 that may warrant further investigation to understand the drivers behind market exuberance or optimism during that year.