Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Western Digital Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
The financial trajectory from 2018 to 2023 is characterized by significant volatility and cyclicality across all key earnings metrics. A pattern of sharp contractions followed by partial recoveries is evident, culminating in a severe downturn in the final reported period.
- EBITDA Trends
- A peak EBITDA of US$ 4,817 million was recorded in 2018, which was followed by a precipitous decline to US$ 1,994 million in 2019. Following a period of relative stability in 2020, a growth trend emerged, with values rising to US$ 2,465 million in 2021 and peaking again at US$ 3,356 million in 2022. However, this recovery was reversed in 2023, as EBITDA fell into negative territory, reaching negative US$ 420 million.
- Operating Profitability (EBIT)
- Earnings before interest and tax (EBIT) mirrored the volatility of EBITDA but exhibited more pronounced swings. The EBIT declined from US$ 2,761 million in 2018 to US$ 182 million in 2019. While a recovery was observed through 2022, where EBIT reached US$ 2,427 million, the 2023 fiscal year resulted in a substantial operating loss of US$ 1,248 million.
- Net Income and Bottom-Line Volatility
- Net income demonstrated the highest degree of instability. The results alternated between profitability and losses, with negative figures reported in 2019, 2020, and 2023. The net loss in 2023 was the most severe in the analyzed period, totaling US$ 1,706 million, which underscores a critical deterioration in overall profitability coinciding with the decline in operational cash flow proxies.
- Relationship Between Earnings Metrics
- A consistent gap between EBITDA and EBIT is observable throughout most of the period, indicating substantial recurring depreciation and amortization expenses. The convergence of these metrics toward negative values in 2023 suggests that operational losses were so severe they overcame the typical additive effect of non-cash charges.
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Enterprise Value to EBITDA Ratio, Current
Western Digital Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 24,601) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | (420) |
| Valuation Ratio | |
| EV/EBITDA | — |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Apple Inc. | 29.11 |
| Arista Networks Inc. | 43.96 |
| Cisco Systems Inc. | 19.53 |
| Dell Technologies Inc. | 18.69 |
| Lumentum Holdings Inc. | — |
| Super Micro Computer Inc. | 7.63 |
| EV/EBITDA, Sector | |
| Technology Hardware & Equipment | 37.37 |
| EV/EBITDA, Industry | |
| Information Technology | 50.01 |
Based on: 10-K (reporting date: 2023-06-30).
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
Western Digital Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 18,934) | 19,762) | 24,880) | 17,975) | 22,655) | 24,758) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | (420) | 3,356) | 2,465) | 1,933) | 1,994) | 4,817) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | — | 5.89 | 10.09 | 9.30 | 11.36 | 5.14 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Apple Inc. | 21.66 | 19.15 | 20.47 | — | — | — | |
| Arista Networks Inc. | 31.29 | 24.52 | 37.29 | — | — | — | |
| Cisco Systems Inc. | 12.16 | 10.52 | 15.05 | — | — | — | |
| Dell Technologies Inc. | 6.61 | 4.85 | 9.32 | — | — | — | |
| Lumentum Holdings Inc. | 23.03 | 11.47 | 7.83 | — | — | — | |
| Super Micro Computer Inc. | 16.77 | 10.50 | 11.19 | — | — | — | |
| EV/EBITDA, Sector | |||||||
| Technology Hardware & Equipment | 20.01 | 17.24 | 19.12 | — | — | — | |
| EV/EBITDA, Industry | |||||||
| Information Technology | 23.55 | 18.32 | 20.52 | — | — | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 18,934 ÷ -420 = —
4 Click competitor name to see calculations.
The financial trajectory between June 2018 and June 2023 is characterized by significant volatility in operational profitability and fluctuating market valuation, culminating in a period of negative earnings.
- Enterprise Value (EV) Trends
- The enterprise value exhibited a general downward trend over the six-year period, decreasing from 24,758 million USD in 2018 to 18,934 million USD in 2023. A notable exception occurred in 2021, where the value peaked at 24,880 million USD before retreating in the subsequent two years.
- EBITDA Performance
- Operational earnings experienced a sharp decline between 2018 and 2019, falling from 4,817 million USD to 1,994 million USD. While a gradual recovery was observed through 2022, reaching 3,356 million USD, this trend reversed abruptly in 2023, with EBITDA collapsing to negative 420 million USD.
- EV/EBITDA Ratio Dynamics
- The EV/EBITDA ratio expanded significantly from 5.14 in 2018 to 11.36 in 2019, reflecting a contraction in earnings that outpaced the decline in enterprise value. The ratio remained elevated between 9.30 and 10.09 from 2020 to 2021, before compressing to 5.89 in 2022 as EBITDA improved. Due to the negative EBITDA recorded in 2023, a meaningful EV/EBITDA ratio could not be calculated for the final period.
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