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Enterprise Value to EBITDA (EV/EBITDA)
Difficulty: Intermediate
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Lowe’s Cos. Inc., EBITDA calculation
USD $ in millions
Based on: 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31), 10-K (filing date: 2013-04-02).
| 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. | Lowe’s Cos. Inc.’s EBITDA increased from 2016 to 2017 and from 2017 to 2018. |
Enterprise Value to EBITDA Ratio, Current
Lowe’s Cos. Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors | |
| Amazon.com Inc. | |
| Costco Wholesale Corp. | |
| eBay Inc. | |
| Home Depot Inc. | |
| Netflix Inc. | |
| Target Corp. | |
| TJX Cos. Inc. | |
| Walmart Inc. | |
| EV/EBITDA, Sector | |
| General Retailers | |
| EV/EBITDA, Industry | |
| Consumer Services | |
Based on: 10-K (filing date: 2018-04-02).
If company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Lowe’s Cos. Inc., historical EV/EBITDA calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31), 10-K (filing date: 2013-04-02).
2018 Calculations
3 EV/EBITDA = EV ÷ EBITDA
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/EBITDA | EV/EBITDA is a valuation indicator for the overall company rather than common stock. | Lowe’s Cos. Inc.’s EV/EBITDA ratio declined from 2016 to 2017 and from 2017 to 2018. |
