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HP Inc. (HPQ)


Enterprise Value to EBITDA (EV/EBITDA)

Intermediate level


Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

HP Inc., EBITDA calculation

US$ in millions

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12 months ended Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Net earnings 5,327  2,526  2,496  4,554  5,013  5,113 
Less: Net loss from discontinued operations —  —  (170) —  —  — 
Add: Income tax expense (2,314) 750  1,095  178  1,544  1,397 
Earnings before tax (EBT) 3,013  3,276  3,761  4,732  6,557  6,510 
Add: Interest expense on borrowings 312  309  273  327  344  426 
Earnings before interest and tax (EBIT) 3,325  3,585  4,034  5,059  6,901  6,936 
Add: Depreciation and amortization 528  354  332  4,061  4,334  4,611 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,853  3,939  4,366  9,120  11,235  11,547 

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

Item Description The company
EBITDA To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. HP Inc.’s EBITDA decreased from 2016 to 2017 and from 2017 to 2018.

Enterprise Value to EBITDA Ratio, Current

HP Inc., current EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (US$ in millions)
Enterprise value (EV) 32,268 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,853 
Valuation Ratio
EV/EBITDA 8.37
Benchmarks
EV/EBITDA, Competitors1
Apple Inc. 17.34
Applied Materials Inc. 14.68
Broadcom Inc. 16.29
Cisco Systems Inc. 11.19
Intel Corp. 9.36
Micron Technology Inc. 4.88
NVIDIA Corp. 34.71
Qualcomm Inc. 11.09
Texas Instruments Inc. 15.52
EV/EBITDA, Sector
Technology Hardware & Equipment 14.01
EV/EBITDA, Industry
Technology 17.22

Based on: 10-K (filing date: 2018-12-13).

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

HP Inc., historical EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 35,448  34,944  27,000  29,583  77,821  64,390 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 3,853  3,939  4,366  9,120  11,235  11,547 
Valuation Ratio
EV/EBITDA3 9.20 8.87 6.18 3.24 6.93 5.58
Benchmarks
EV/EBITDA, Competitors4
Apple Inc. 11.54 12.11 8.68 8.14 10.14
Applied Materials Inc. 6.24 12.35 13.76 10.35 14.94
Broadcom Inc. 12.21 16.58 34.17 15.64 27.64
Cisco Systems Inc. 12.07 7.81 7.66 6.90 7.52
Intel Corp. 7.11 7.74 8.42 5.70 6.62
Micron Technology Inc. 2.41 5.52 7.68 3.75 6.63
NVIDIA Corp. 40.89 26.29 14.36 9.05 8.60
Qualcomm Inc. 28.47 12.74 10.77 10.79 11.15
Texas Instruments Inc. 13.08 14.42 12.95 9.86 12.09
EV/EBITDA, Sector
Technology Hardware & Equipment 10.59 10.99 9.43 7.83
EV/EBITDA, Industry
Technology 12.77 13.89 12.09 10.57

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

1 See details »

2 See details »

3 2018 Calculation
EV/EBITDA = EV ÷ EBITDA
= 35,448 ÷ 3,853 = 9.20

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/EBITDA Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock. HP Inc.’s EV/EBITDA ratio increased from 2016 to 2017 and from 2017 to 2018.