Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

Enterprise Value to EBITDA (EV/EBITDA) 

Microsoft Excel

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

Microsoft Corp., EBITDA calculation

US$ in millions

Microsoft Excel
12 months ended: Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Net income 72,738  61,271  44,281  39,240  16,571  21,204 
Add: Income tax expense 10,978  9,831  8,755  4,448  19,903  1,945 
Earnings before tax (EBT) 83,716  71,102  53,036  43,688  36,474  23,149 
Add: Interest expense 2,063  2,346  2,591  2,686  2,733  2,222 
Earnings before interest and tax (EBIT) 85,779  73,448  55,627  46,374  39,207  25,371 
Add: Depreciation, amortization, and other 14,460  11,686  12,796  11,682  10,261  8,778 
Earnings before interest, tax, depreciation and amortization (EBITDA) 100,239  85,134  68,423  58,056  49,468  34,149 

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

Item Description The company
EBITDA To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. Microsoft Corp. EBITDA increased from 2020 to 2021 and from 2021 to 2022.

Enterprise Value to EBITDA Ratio, Current

Microsoft Corp., current EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 1,696,869 
Earnings before interest, tax, depreciation and amortization (EBITDA) 100,239 
Valuation Ratio
EV/EBITDA 16.93
Benchmarks
EV/EBITDA, Competitors1
Accenture PLC 16.00
Adobe Inc. 19.11
International Business Machines Corp. 12.19
Intuit Inc. 33.48
Mastercard Inc. 24.28
Oracle Corp. 15.98
PayPal Holdings Inc. 11.25
Salesforce Inc. 28.57
ServiceNow Inc. 99.53
Visa Inc. 21.28
EV/EBITDA, Sector
Software & Services 18.97
EV/EBITDA, Industry
Information Technology 16.59

Based on: 10-K (reporting date: 2022-06-30).

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

Microsoft Corp., historical EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 2,021,362  2,093,369  1,487,741  999,078  775,247  512,315 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 100,239  85,134  68,423  58,056  49,468  34,149 
Valuation Ratio
EV/EBITDA3 20.17 24.59 21.74 17.21 15.67 15.00
Benchmarks
EV/EBITDA, Competitors4
Accenture PLC 21.47 15.93 15.60 13.79 15.98
Adobe Inc. 35.44 43.06 41.16 37.27 36.77
International Business Machines Corp. 12.53 12.28 10.23 9.54 10.76
Intuit Inc. 36.22 51.96 35.70 34.27 31.25 21.97
Mastercard Inc. 31.84 38.83 32.61 28.36 24.94
Oracle Corp. 17.12 13.78 11.54 11.83 9.50 12.73
PayPal Holdings Inc. 19.34 43.02 27.91 24.59 22.50
Salesforce Inc. 38.88 33.82 49.43 55.96 84.53 75.36
ServiceNow Inc. 147.45 220.91 187.17 260.48 1,506.85
Visa Inc. 24.81 29.80 24.56 22.59 20.10
EV/EBITDA, Sector
Software & Services 24.43 24.38 19.87 17.41 16.99
EV/EBITDA, Industry
Information Technology 20.55 20.83 15.58 13.17 13.31

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

1 See details »

2 See details »

3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 2,021,362 ÷ 100,239 = 20.17

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/EBITDA Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock. Microsoft Corp. EV/EBITDA ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.