Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Humana Inc., EBITDA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
An examination of the financial performance from 2019 to 2023 reveals a consistent trajectory across all primary earnings metrics, characterized by a significant peak in 2020 followed by a period of volatility and a subsequent gradual decline.
- EBITDA Trend Analysis
- EBITDA experienced a sharp increase from US$ 4,287 million in 2019 to a peak of US$ 5,573 million in 2020. Following this peak, a contraction occurred in 2021, bringing the value down to US$ 4,458 million. A partial recovery was observed in 2022 with an increase to US$ 4,810 million, before a slight decline to US$ 4,730 million was recorded at the end of 2023.
- Operational Profitability Patterns
- Earnings before interest and tax (EBIT) and earnings before tax (EBT) mirrored the movements of EBITDA. EBIT peaked at US$ 4,957 million in 2020 and maintained a relatively stable range between US$ 3,745 million and US$ 3,965 million from 2021 through 2023. This suggests that while the exceptional growth of 2020 was not sustained, operational profitability remained higher than 2019 levels throughout the remainder of the period.
- Net Income Divergence
- A divergence is observable between EBITDA and net income attributable to the company. While EBITDA remained above its 2019 baseline as of 2023, net income has shown a steady decline from its 2020 peak of US$ 3,367 million to US$ 2,489 million in 2023. This indicates that the reduction in the final bottom line has been more severe than the fluctuations observed in the core operational cash flow proxy.
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Enterprise Value to EBITDA Ratio, Current
Humana Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 22,813) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 4,730) |
| Valuation Ratio | |
| EV/EBITDA | 4.82 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Abbott Laboratories | 16.66 |
| Elevance Health Inc. | 9.26 |
| Intuitive Surgical Inc. | 39.26 |
| Medtronic PLC | 15.64 |
| UnitedHealth Group Inc. | 17.82 |
| EV/EBITDA, Sector | |
| Health Care Equipment & Services | 14.37 |
| EV/EBITDA, Industry | |
| Health Care | 26.51 |
Based on: 10-K (reporting date: 2023-12-31).
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
Humana Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 34,660) | 55,740) | 50,040) | 38,505) | 39,875) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 4,730) | 4,810) | 4,458) | 5,573) | 4,287) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 7.33 | 11.59 | 11.22 | 6.91 | 9.30 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Abbott Laboratories | 19.49 | 15.85 | 17.42 | — | — | |
| Elevance Health Inc. | 10.24 | 10.26 | 10.05 | — | — | |
| Intuitive Surgical Inc. | 53.08 | 40.96 | 44.10 | — | — | |
| Medtronic PLC | 15.28 | 14.99 | 24.41 | — | — | |
| UnitedHealth Group Inc. | 13.60 | 15.11 | 17.39 | — | — | |
| EV/EBITDA, Sector | ||||||
| Health Care Equipment & Services | 15.60 | 15.26 | 18.05 | — | — | |
| EV/EBITDA, Industry | ||||||
| Health Care | 20.27 | 14.00 | 14.33 | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 34,660 ÷ 4,730 = 7.33
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA ratio exhibited significant volatility between 2019 and 2023, reflecting substantial fluctuations in market valuation relative to operational earnings. The ratio transitioned from 9.30 in 2019 to a peak of 11.59 in 2022, before contracting sharply to 7.33 by the end of 2023.
- Enterprise Value Trends
- Enterprise value experienced a period of expansion between 2020 and 2022, increasing from US$ 38,505 million to a peak of US$ 55,740 million. This growth was followed by a significant correction in 2023, where the value dropped to US$ 34,660 million, the lowest level recorded across the five-year period.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization reached a five-year high in 2020 at US$ 5,573 million. Despite a decline in 2021, EBITDA remained relatively stable from 2022 to 2023, hovering between US$ 4,730 million and US$ 4,810 million. The consistency of these earnings suggests that the volatility observed in the valuation multiple was driven primarily by changes in enterprise value rather than operational performance.
- EV/EBITDA Ratio Dynamics
- The valuation multiple decreased to 6.91 in 2020, followed by a rapid expansion to 11.22 in 2021 and 11.59 in 2022, indicating a period of increased market premium. The subsequent decline to 7.33 in 2023 represents a significant compression of the multiple, coinciding with the sharp reduction in overall enterprise value.
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