Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Gilead Sciences Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net Income Attributable to Gilead
- The net income attributable to the company displayed a significant increase from 123 million USD in 2020 to a peak of 6225 million USD in 2021. Subsequently, it declined to 4592 million USD in 2022, followed by a moderate recovery to 5665 million USD in 2023, and dropped sharply to 480 million USD in 2024. This pattern suggests a volatile profitability performance over the observed periods with a notable peak in 2021.
- Earnings Before Tax (EBT)
- EBT rose markedly from 1669 million USD in 2020 to 8278 million USD in 2021. It then decreased to 5814 million USD in 2022, increased again to 6859 million USD in 2023, and finally fell substantially to 690 million USD in 2024. The trend mirrors the net income pattern, indicating fluctuations in profitability before tax obligations.
- Earnings Before Interest and Tax (EBIT)
- EBIT showed a strong upward movement from 2653 million USD in 2020 to 9279 million USD in 2021. It then contracted to 6749 million USD in 2022, increased somewhat to 7803 million USD in 2023, and experienced a considerable decline to 1667 million USD in 2024. This suggests variability in operational profitability over the years, with 2021 being an exceptional year.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA increased significantly from 4133 million USD in 2020 to 11329 million USD in 2021, followed by a decline to 8852 million USD in 2022. It then rose again to 10496 million USD in 2023 before dropping dramatically to 4434 million USD in 2024. The pattern of EBITDA also reflects volatility, with a peak in 2021 and a sharp decrease in 2024.
- Overall Observations
- Across all profitability measures, the year 2021 stands out with exceptional performance, showing large increases followed by subsequent declines and partial recoveries in later years. The sharp drop in 2024 across all metrics indicates a significant decrease in profitability, which could be attributed to extraordinary circumstances or changes in the operating environment. The data reveals a cyclical trend with high variability, underlining the importance of further investigation into the factors driving these fluctuations.
Enterprise Value to EBITDA Ratio, Current
Gilead Sciences Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 157,499) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 4,434) |
| Valuation Ratio | |
| EV/EBITDA | 35.52 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| AbbVie Inc. | 26.72 |
| Amgen Inc. | 15.54 |
| Bristol-Myers Squibb Co. | 42.88 |
| Danaher Corp. | 21.68 |
| Eli Lilly & Co. | 50.97 |
| Johnson & Johnson | 15.66 |
| Merck & Co. Inc. | 9.09 |
| Pfizer Inc. | 10.45 |
| Regeneron Pharmaceuticals Inc. | 10.03 |
| Thermo Fisher Scientific Inc. | 16.02 |
| Vertex Pharmaceuticals Inc. | 240.59 |
| EV/EBITDA, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 20.78 |
| EV/EBITDA, Industry | |
| Health Care | 18.73 |
Based on: 10-K (reporting date: 2024-12-31).
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
Gilead Sciences Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 158,992) | 109,266) | 122,947) | 97,096) | 102,914) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 4,434) | 10,496) | 8,852) | 11,329) | 4,133) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 35.86 | 10.41 | 13.89 | 8.57 | 24.90 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| AbbVie Inc. | 26.97 | 20.79 | 13.31 | 13.44 | 21.34 | |
| Amgen Inc. | 15.31 | 14.13 | 12.97 | 13.22 | 12.24 | |
| Bristol-Myers Squibb Co. | 48.23 | 6.51 | 9.46 | 8.65 | 34.35 | |
| Danaher Corp. | 22.34 | 26.41 | 18.42 | 21.05 | 26.68 | |
| Eli Lilly & Co. | 55.98 | 85.33 | 37.74 | 29.85 | 23.67 | |
| Johnson & Johnson | 15.77 | 16.45 | 14.78 | 14.47 | 18.20 | |
| Merck & Co. Inc. | 9.90 | 51.30 | 13.91 | 12.18 | 16.05 | |
| Pfizer Inc. | 10.60 | 22.50 | 6.12 | 8.64 | 15.78 | |
| Regeneron Pharmaceuticals Inc. | 13.55 | 20.16 | 15.27 | 6.68 | 12.70 | |
| Thermo Fisher Scientific Inc. | 19.89 | 21.83 | 20.25 | 20.21 | 18.72 | |
| Vertex Pharmaceuticals Inc. | 231.93 | 21.57 | 14.91 | 18.92 | 14.81 | |
| EV/EBITDA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 22.07 | 22.59 | 13.58 | 13.16 | 18.90 | |
| EV/EBITDA, Industry | ||||||
| Health Care | 20.34 | 19.28 | 13.93 | 14.07 | 17.33 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 158,992 ÷ 4,434 = 35.86
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated fluctuations over the five-year period. It initially decreased from approximately $102.9 billion in 2020 to around $97.1 billion in 2021. This was followed by an increase to nearly $123.0 billion in 2022, a decline to about $109.3 billion in 2023, and then a substantial rise to almost $159.0 billion in 2024. The large increase in the final year indicates notable changes in market valuation or capital structure.
- Earnings before interest, tax, depreciation and amortization (EBITDA)
- EBITDA showed significant volatility throughout the period. Starting at $4.1 billion in 2020, it surged to a peak of $11.3 billion in 2021, before declining to $8.9 billion in 2022. A moderate recovery to $10.5 billion occurred in 2023, followed by a sharp drop to $4.4 billion in 2024. This pattern suggests variations in operational performance, potentially driven by business cycles, cost management, or revenue fluctuations.
- EV/EBITDA Ratio
- The EV/EBITDA ratio exhibited notable swings reflecting the combined movement of enterprise value and EBITDA. The ratio started at a high 24.9 in 2020, dropped significantly to 8.57 in 2021, indicating more favorable valuation relative to earnings that year. It then climbed to 13.89 in 2022 and slightly fell to 10.41 in 2023, showing moderate valuation adjustments. However, 2024 saw an extreme increase to 35.86, driven by the simultaneous drop in EBITDA and rise in enterprise value, indicating potentially overvalued conditions or reduced operational profitability relative to valuation.
- Summary
- Overall, the data reveals substantial volatility in both enterprise value and EBITDA over the five years. The peaks in EBITDA occurred in 2021 and 2023, contrasting with significant declines in 2020, 2022, and particularly 2024. The enterprise value did not follow a consistent trend, with notable increases in 2022 and 2024 despite fluctuating earnings performance. The EV/EBITDA ratio’s large swings highlight changing market perceptions of value relative to earnings. The sharp rise in this ratio in 2024 suggests a divergence between market valuation and operational profitability, warranting further investigation into the underlying causes.