Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Microchip Technology Inc., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
The financial data presents a series of performance indicators over six fiscal years, reflecting varying growth and fluctuations across key earnings measures.
- Net Income
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Net income demonstrates an overall upward trend with notable volatility. Starting at 164,639 thousand US dollars in 2017, it more than doubled by 2019, reaching 355,900 thousand. It then surged sharply in 2020 to 570,600 thousand, followed by a decline in 2021 to 349,400 thousand. In 2022, net income significantly increased to 1,285,500 thousand, marking the highest value in the period analyzed.
- Earnings Before Tax (EBT)
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EBT figures reveal considerable fluctuations with an irregular pattern. The value rose sharply from 89,787 thousand in 2017 to 737,300 thousand in 2018, an exceptional increase. However, it decreased to 204,500 thousand in 2019 and further declined to 150,400 thousand in 2020. The value rebounded in 2021 to 339,500 thousand and reached its peak at 1,482,500 thousand in 2022, suggesting recovery and strong profitability before tax in the latest year.
- Earnings Before Interest and Tax (EBIT)
-
EBIT shows a similar pattern of growth with some irregularities. From 236,133 thousand in 2017, it increased dramatically to 936,300 thousand in 2018. A decrease followed in 2019 to 707,400 thousand and a slight decline in 2020 to 647,700 thousand. EBIT then improved in 2021 to 696,400 thousand before a significant jump to 1,739,500 thousand in 2022.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
-
EBITDA indicates consistent growth throughout the period, with less pronounced volatility. Beginning at 705,341 thousand in 2017, it more than doubled by 2018 to 1,552,200 thousand. It continued to rise steadily to 1,583,800 thousand in 2019 and then showed a stronger increase to 1,863,300 thousand in 2020. Although there was a slight decrease in 2021 to 1,849,700 thousand, EBITDA reached a maximum of 2,883,000 thousand in 2022, highlighting improved operational profitability.
In summary, the data reflects substantial overall growth in earnings measures, particularly in the last fiscal year analyzed (2022). The extraordinary peaks in 2018 for EBT and EBIT suggest a unique event or adjustment that year. Despite some fluctuations, the positive trajectory in EBITDA and net income by 2022 points to strengthening earnings quality and operational efficiency. The stronger growth in EBITDA compared to EBIT and EBT implies that non-cash expenses such as depreciation and amortization might have a significant impact. The substantial rise in net income and pre-tax earnings in 2022 indicates notable improvements in profitability and possibly effective cost management or revenue growth in that year.
Enterprise Value to EBITDA Ratio, Current
Microchip Technology Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 53,673,187) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,883,000) |
| Valuation Ratio | |
| EV/EBITDA | 18.62 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Advanced Micro Devices Inc. | 45.19 |
| Analog Devices Inc. | 30.12 |
| Applied Materials Inc. | 17.70 |
| Broadcom Inc. | 56.48 |
| Intel Corp. | 112.98 |
| KLA Corp. | 31.87 |
| Lam Research Corp. | 26.35 |
| Micron Technology Inc. | 15.11 |
| NVIDIA Corp. | 46.31 |
| Qualcomm Inc. | 13.68 |
| Texas Instruments Inc. | 27.45 |
| EV/EBITDA, Sector | |
| Semiconductors & Semiconductor Equipment | 53.47 |
| EV/EBITDA, Industry | |
| Information Technology | 38.58 |
Based on: 10-K (reporting date: 2022-03-31).
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
Microchip Technology Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 44,336,602) | 47,583,914) | 30,624,300) | 29,229,042) | 22,683,106) | 20,577,617) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,883,000) | 1,849,700) | 1,863,300) | 1,583,800) | 1,552,200) | 705,341) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 15.38 | 25.73 | 16.44 | 18.46 | 14.61 | 29.17 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Advanced Micro Devices Inc. | 22.63 | 34.19 | 62.10 | — | — | — | |
| Analog Devices Inc. | 16.23 | 38.55 | 23.61 | 18.67 | — | — | |
| Applied Materials Inc. | 11.04 | 17.54 | 16.82 | 14.60 | — | — | |
| Broadcom Inc. | 13.54 | 19.72 | 18.89 | 16.32 | — | — | |
| Intel Corp. | 6.20 | 6.02 | 6.40 | — | — | — | |
| KLA Corp. | 14.97 | 19.26 | 18.10 | 14.14 | — | — | |
| Lam Research Corp. | 11.36 | 16.94 | 18.35 | 10.69 | — | — | |
| Micron Technology Inc. | 3.26 | 6.05 | 6.46 | 3.90 | — | — | |
| NVIDIA Corp. | 57.58 | 58.98 | 52.92 | — | — | — | |
| Qualcomm Inc. | 7.84 | 12.76 | 19.49 | 10.55 | — | — | |
| Texas Instruments Inc. | 14.69 | 15.54 | 21.75 | — | — | — | |
| EV/EBITDA, Sector | |||||||
| Semiconductors & Semiconductor Equipment | 14.51 | 15.52 | 14.73 | — | — | — | |
| EV/EBITDA, Industry | |||||||
| Information Technology | 18.28 | 20.46 | 19.69 | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 44,336,602 ÷ 2,883,000 = 15.38
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value shows a general upward trend from 2017 to 2021, increasing from approximately $20.58 billion to $47.58 billion. This represents more than a twofold increase over the five-year period. However, in 2022, there is a decline to about $44.34 billion, indicating a slight decrease from the prior year after significant growth.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA exhibits strong growth over the period. It starts at roughly $705 million in 2017 and rises significantly to $2.88 billion by 2022. The most notable jump occurs between 2021 and 2022, where EBITDA increases by over $1 billion, indicating enhanced operating performance and profitability. Some fluctuations are observed, such as a marginal drop between 2020 and 2021.
- EV/EBITDA Ratio
- The EV/EBITDA ratio decreases notably from 29.17 in 2017 to 14.61 in 2018, suggesting a more attractive valuation relative to earnings at that point. The ratio then fluctuates between 14.61 and 25.73 over the following years, peaking in 2021 at 25.73 before dropping again to 15.38 in 2022. These variations indicate changing market perceptions of the company's valuation against its earnings capacity, with the period ending at a more moderate multiple compared to the earlier years.
- Overall Insights
- The data reflects a company that significantly expanded its market valuation and improved its earnings power over the six-year horizon. Despite a reduction in enterprise value in the most recent year, the substantial increase in EBITDA underscores strengthened operational efficiency or revenue growth. The fluctuations in EV/EBITDA suggest that valuation multiples reacted to both underlying earnings changes and market conditions, with the recent year showing a relatively lower valuation multiple that could imply increased earnings support or market caution.