Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
NXP Semiconductors N.V., 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), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
The financial performance between 2017 and 2021 is characterized by a period of significant volatility, marked by a sharp contraction in profitability during 2019 and 2020 followed by a substantial recovery in 2021.
- EBITDA Performance Trends
- Earnings before interest, tax, depreciation, and amortization experienced an initial increase, peaking at US$ 4,694 million in 2018. This was followed by a downward trend, with values falling to US$ 2,709 million in 2019 and reaching a period low of US$ 2,347 million in 2020. A strong recovery was observed in 2021, where EBITDA rose to US$ 3,809 million.
- Operating Income and EBIT Volatility
- Earnings before interest and tax (EBIT) exhibited more pronounced fluctuations than EBITDA. After reaching US$ 2,707 million in 2018, EBIT plummeted to US$ 662 million in 2019 and further declined to US$ 359 million in 2020. The recovery in 2021 saw EBIT return to US$ 2,547 million, nearly restoring the operating income levels seen in 2018.
- Net Income and Bottom-Line Analysis
- Net income attributable to stockholders showed the most extreme variance. From a stable position of approximately US$ 2.2 billion in 2017 and 2018, figures dropped precipitously to US$ 243 million in 2019 and US$ 52 million in 2020. The 2021 fiscal year marked a significant return to profitability, with net income rising to US$ 1,871 million.
- Impact of Non-Cash Charges and Taxes
- A substantial and consistent gap between EBITDA and EBIT is observed across all five years, indicating high levels of depreciation and amortization. Furthermore, earnings before tax (EBT) entered negative territory in 2020 at -US$ 3 million, highlighting a critical dip in pre-tax profitability that coincided with the lowest recorded net income of the period.
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Enterprise Value to EBITDA Ratio, Current
NXP Semiconductors N.V., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 53,797) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 3,809) |
| Valuation Ratio | |
| EV/EBITDA | 14.12 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Advanced Micro Devices Inc. | 140.00 |
| Analog Devices Inc. | 38.91 |
| Applied Materials Inc. | 38.38 |
| Broadcom Inc. | 49.93 |
| Intel Corp. | 44.70 |
| KLA Corp. | 39.23 |
| Lam Research Corp. | 44.31 |
| Marvell Technology Inc. | 51.00 |
| Micron Technology Inc. | 66.33 |
| NVIDIA Corp. | 37.15 |
| Qualcomm Inc. | 14.42 |
| Texas Instruments Inc. | 31.88 |
| EV/EBITDA, Sector | |
| Semiconductors & Semiconductor Equipment | 106.66 |
| EV/EBITDA, Industry | |
| Information Technology | 59.93 |
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
NXP Semiconductors N.V., 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 | 58,239) | 54,993) | 38,605) | 32,345) | 42,945) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 3,809) | 2,347) | 2,709) | 4,694) | 4,272) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 15.29 | 23.43 | 14.25 | 6.89 | 10.05 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Advanced Micro Devices Inc. | 34.19 | — | — | — | — | |
| Analog Devices Inc. | 38.55 | 23.61 | — | — | — | |
| Applied Materials Inc. | 17.54 | 16.82 | — | — | — | |
| Broadcom Inc. | 19.72 | 18.89 | — | — | — | |
| Intel Corp. | 6.02 | — | — | — | — | |
| KLA Corp. | 19.26 | — | — | — | — | |
| Lam Research Corp. | 16.94 | — | — | — | — | |
| Marvell Technology Inc. | 84.53 | — | — | — | — | |
| Micron Technology Inc. | 6.05 | 6.46 | — | — | — | |
| NVIDIA Corp. | 58.98 | — | — | — | — | |
| Qualcomm Inc. | 12.76 | 19.49 | — | — | — | |
| Texas Instruments Inc. | 15.54 | — | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 15.76 | — | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Information Technology | 20.52 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
3 2021 Calculation
EV/EBITDA = EV ÷ EBITDA
= 58,239 ÷ 3,809 = 15.29
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA (EV/EBITDA) ratio exhibited significant volatility between 2017 and 2021, characterized by a sharp expansion in valuation multiples during the middle of the period followed by a partial correction in the final year.
- Enterprise Value (EV) Trends
- The Enterprise Value experienced an initial decline from $42,945 million in 2017 to $32,345 million in 2018. Following this trough, a consistent upward trajectory was observed, with the value increasing for three consecutive years to reach a peak of $58,239 million by December 31, 2021.
- EBITDA Performance
- Operational earnings showed a divergent pattern compared to the Enterprise Value. EBITDA peaked in 2018 at $4,694 million but subsequently entered a period of contraction, falling to $2,709 million in 2019 and reaching a five-year low of $2,347 million in 2020. A notable recovery occurred in 2021, with EBITDA rising to $3,809 million.
- EV/EBITDA Ratio Analysis
- The valuation multiple shifted from 10.05 in 2017 to a low of 6.89 in 2018, representing a period of relative undervaluation or increased operational efficiency. Between 2018 and 2020, the ratio increased aggressively, peaking at 23.43. This expansion was driven by the simultaneous increase in Enterprise Value and the decline in EBITDA. By 2021, the ratio contracted to 15.29, as the recovery in EBITDA outpaced the growth in Enterprise Value, suggesting a normalization of the valuation multiple.
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