Enterprise Value to EBITDA (EV/EBITDA)
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EOG Resources Inc. pages available for free this week:
- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
EOG Resources Inc., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Net Income (Loss) Trend
- The net income figures exhibit a significant recovery over the five-year period. In 2015 and 2016, the company experienced substantial losses, with values of approximately -4.5 billion and -1.1 billion US dollars respectively. However, starting in 2017, the financial performance improved markedly, resulting in positive net income of about 2.6 billion US dollars. This positive trend continued upward reaching roughly 3.4 billion in 2018 before a slight decline to approximately 2.7 billion in 2019.
- Earnings Before Tax (EBT) Analysis
- The EBT figures correlate with the net income trend, showing heavy losses in 2015 and 2016 at approximately -6.9 billion and -1.6 billion US dollars respectively. In 2017, the company moved into profitability with 661 million US dollars, followed by robust growth to more than 4.2 billion in 2018. Although 2019 saw a decrease to about 3.5 billion, it remained significantly positive compared to earlier years.
- Earnings Before Interest and Tax (EBIT) Evaluation
- EBIT mirrors the EBT pattern, with substantial negative values in 2015 and 2016, recorded at roughly -6.7 billion and -1.3 billion US dollars. From 2017 onwards, EBIT turned positive, reaching nearly 936 million, and experienced strong growth to approximately 4.5 billion in 2018, before a modest decrease to around 3.7 billion in 2019.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Insight
- EBITDA shows a marked improvement from a negative 3.4 billion in 2015 to a positive 2.3 billion in 2016. The upward trajectory continued with EBITDA rising to about 4.3 billion in 2017 and peaking at roughly 7.9 billion in 2018. Despite a slight decrease to about 7.5 billion in 2019, the company maintained a solid EBITDA level reflecting strong operational profitability and cash flow generation.
- Overall Financial Performance Interpretation
- The financial data indicate a recovery phase starting in 2017 following significant losses in 2015 and 2016. Operational and profitability metrics improved consistently, with a substantial turnaround evident across net income, EBT, EBIT, and EBITDA. Though there is a slight setback in some figures in 2019 compared to 2018, the company remains in a robust financial position relative to the initial years analyzed. This suggests effective management actions that enhanced profitability and operational efficiency during the latter part of the period.
Enterprise Value to EBITDA Ratio, Current
EOG Resources Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Chevron Corp. | |
| ConocoPhillips | |
| Exxon Mobil Corp. | |
| Occidental Petroleum Corp. | |
Based on: 10-K (reporting date: 2019-12-31).
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
EOG Resources Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Valuation Ratio | ||||||
| EV/EBITDA3 | ||||||
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
3 2019 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a rising trend from 2015 to 2017, increasing from approximately 43.6 billion to 67.4 billion US dollars. However, this was followed by a decline in the subsequent years, falling to about 59.0 billion in 2018 and further to 38.1 billion in 2019. This pattern indicates initial growth in company valuation followed by a significant reduction over the last two years of the reported period.
- Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA showed a marked improvement over the time span. Starting with a negative value of approximately -3.37 billion US dollars in 2015, it moved into positive territory by 2016 with around 2.28 billion. Thereafter, EBITDA increased consistently, reaching approximately 7.48 billion US dollars by 2019. This progression reflects enhanced operational profitability despite fluctuations in enterprise value.
- EV/EBITDA Ratio
- The EV/EBITDA ratio demonstrated a clear downward trend once data became available starting 2016. The ratio dropped from 27.16 in 2016 to 15.52 in 2017, then continued to fall significantly to 7.45 in 2018 and ultimately stood at 5.09 in 2019. This decline may indicate improving earnings relative to the enterprise value, suggesting the company became more attractively valued in relation to its earnings capacity over time.
- Summary of Trends
- The data indicates a scenario where the company’s enterprise value initially increased before decreasing sharply in the later years, while operational earnings improved steadily from a loss to strong positive figures. Consequently, the EV/EBITDA ratio decreased substantially, implying enhanced value generation efficiency relative to the company’s market valuation. These trends could reflect improved business performance and profitability alongside changing market perceptions and valuation adjustments during the period analyzed.