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 trajectory between 2020 and 2024 is characterized by marked volatility, exhibiting a cyclical pattern of growth, contraction, and recovery across all profitability metrics. A significant peak in performance was reached in 2023, followed by a substantial decline in 2024, mirroring a similar contraction experienced in 2022.
- EBITDA Performance and Volatility
- Earnings before interest, tax, depreciation and amortization experienced an initial period of stability between 2020 and 2021, before dropping from US$ 17,435 million to US$ 12,162 million in 2022. A strong recovery occurred in 2023, reaching a five-year high of US$ 18,197 million, although this was followed by a decline to US$ 13,703 million in 2024.
- Operating Profitability Trends (EBIT)
- Earnings before interest and tax followed a nearly identical trajectory to EBITDA. After remaining relatively flat between 2020 and 2021, EBIT fell to US$ 7,915 million in 2022. The subsequent recovery in 2023 to US$ 13,831 million was offset by a return to downward momentum in 2024, closing at US$ 9,106 million.
- Net Income and Bottom-Line Stability
- Net income attributable to the company demonstrated the highest degree of fluctuation. The value dropped by nearly 48% between 2021 and 2022, falling from US$ 7,910 million to US$ 4,149 million. While 2023 saw a resurgence to US$ 8,344 million, the 2024 figure of US$ 4,614 million indicates a renewed downward trend in net profitability.
- Analysis of Non-Cash Charges
- The variance between EBITDA and EBIT remained relatively consistent throughout the period, suggesting that depreciation and amortization expenses have stayed stable despite the volatility in overall earnings. This indicates that the fluctuations in profitability are driven primarily by operational revenue or expense shifts rather than changes in asset investment or amortization schedules.
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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 | 14.90 |
| Elevance Health Inc. | 8.49 |
| Intuitive Surgical Inc. | 34.43 |
| Medtronic PLC | 13.53 |
| UnitedHealth Group Inc. | 17.10 |
| EV/EBITDA, Sector | |
| Health Care Equipment & Services | 15.24 |
| EV/EBITDA, Industry | |
| Health Care | 25.15 |
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.
The valuation metrics for the period between 2020 and 2024 demonstrate a general contraction in enterprise value accompanied by significant volatility in operational earnings.
- Enterprise Value Trends
- Enterprise value peaked in 2021 at 181,495 million US dollars. Following this peak, a consistent downward trend is observed, with the value declining for three consecutive years to reach a period low of 135,154 million US dollars by December 31, 2024.
- EBITDA Volatility
- Earnings before interest, tax, depreciation, and amortization exhibited substantial fluctuations. A significant dip occurred in 2022, where EBITDA fell to 12,162 million US dollars. This was followed by a sharp recovery in 2023 to a five-year high of 18,197 million US dollars, before declining again to 13,703 million US dollars in 2024.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio showed an inverse relationship with operational earnings. The ratio reached its maximum of 12.42 in 2022, a result of the lowest recorded EBITDA occurring while enterprise value remained relatively high. The ratio subsequently dropped to its lowest point of 8.03 in 2023, coinciding with the peak in EBITDA and a reduction in enterprise value. By the end of 2024, the ratio rose to 9.86, reflecting a contraction in EBITDA that outpaced the decline in enterprise value.
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