Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
CVS Health Corp., 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).
The financial performance from 2020 to 2024 is characterized by significant volatility, with marked fluctuations in operational profitability and net earnings. A recurring pattern of contraction and recovery is evident across all measured profitability metrics, suggesting a cyclical or event-driven impact on the bottom line.
- EBITDA Trends and Volatility
- Earnings before interest, tax, depreciation and amortization experienced a marginal increase between 2020 and 2021, moving from US$ 17,118 million to US$ 17,435 million. A substantial contraction occurred in 2022, with EBITDA falling to US$ 12,162 million, a decrease of approximately 30%. This was followed by a strong recovery in 2023, reaching a five-year peak of US$ 18,197 million, before declining again in 2024 to US$ 13,703 million.
- Operating Income and Expense Analysis
- Earnings before interest and tax (EBIT) mirrored the volatility observed in EBITDA. EBIT declined sharply in 2022 to US$ 7,915 million and again in 2024 to US$ 9,106 million. The consistent spread between EBITDA and EBIT across the period indicates that depreciation and amortization charges remained a significant and relatively stable component of the cost structure, despite the fluctuations in operating cash flow.
- Net Profitability Correlation
- Net income attributable to the company showed a high degree of correlation with operational metrics. The troughs in 2022 (US$ 4,149 million) and 2024 (US$ 4,614 million) align directly with the dips in EBITDA and EBIT. Conversely, the 2023 peak in net income (US$ 8,344 million) corresponds with the period of highest operational profitability. This pattern indicates that fluctuations in net income are primarily driven by operational performance rather than changes in tax strategies or interest obligations.
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Enterprise Value to EBITDA Ratio, Current
CVS Health Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 143,303) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 13,703) |
| Valuation Ratio | |
| EV/EBITDA | 10.46 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Abbott Laboratories | 16.22 |
| Elevance Health Inc. | 8.95 |
| Intuitive Surgical Inc. | 38.57 |
| Medtronic PLC | 15.38 |
| UnitedHealth Group Inc. | 17.89 |
| EV/EBITDA, Sector | |
| Health Care Equipment & Services | 16.45 |
| EV/EBITDA, Industry | |
| Health Care | 27.40 |
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
CVS Health Corp., 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 | 135,154) | 146,035) | 151,066) | 181,495) | 146,595) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 13,703) | 18,197) | 12,162) | 17,435) | 17,118) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 9.86 | 8.03 | 12.42 | 10.41 | 8.56 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Abbott Laboratories | 22.28 | 19.49 | 15.85 | 17.42 | — | |
| Elevance Health Inc. | 8.15 | 10.24 | 10.26 | 10.05 | — | |
| Intuitive Surgical Inc. | 63.04 | 53.08 | 40.96 | 44.10 | — | |
| Medtronic PLC | 14.63 | 15.28 | 14.99 | 24.41 | — | |
| UnitedHealth Group Inc. | 17.17 | 13.60 | 15.11 | 17.39 | — | |
| EV/EBITDA, Sector | ||||||
| Health Care Equipment & Services | 18.57 | 15.60 | 15.26 | 18.05 | — | |
| EV/EBITDA, Industry | ||||||
| Health Care | 21.03 | 20.27 | 14.00 | 14.33 | — | |
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
= 135,154 ÷ 13,703 = 9.86
4 Click competitor name to see calculations.
An analysis of the valuation and operational performance from 2020 to 2024 reveals a period of significant volatility in both enterprise value and EBITDA, resulting in fluctuating valuation multiples.
- Enterprise Value (EV) Trend
- Enterprise value peaked on December 31, 2021, at 181,495 million US dollars. Following this peak, a consistent downward trend is observed, with the value declining to 135,154 million US dollars by December 31, 2024, representing a contraction of approximately 25% from the 2021 high.
- EBITDA Volatility
- Earnings before interest, tax, depreciation and amortization demonstrated instability over the five-year period. A notable decline occurred in 2022, reaching a low of 12,162 million US dollars. This was followed by a sharp recovery to a five-year peak of 18,197 million US dollars in 2023, before contracting again to 13,703 million US dollars in 2024.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio exhibited a strong correlation with the fluctuations in operational earnings. The ratio climbed from 8.56 in 2020 to a maximum of 12.42 in 2022, a movement primarily driven by the significant drop in EBITDA. A correction occurred in 2023, bringing the ratio to its lowest point of 8.03, reflecting the convergence of peak EBITDA and a declining enterprise value. By December 31, 2024, the ratio rose to 9.86, indicating that the reduction in EBITDA outpaced the decline in enterprise value during the final year.
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