Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Marathon Oil Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The financial performance from 2017 to 2021 is characterized by significant volatility across net income and operating profit metrics, though operational cash generation potential remained positive throughout the entire period.
- EBITDA Performance Trends
- Earnings before interest, tax, depreciation and amortization exhibited a cyclical pattern, peaking at 4,148 million US dollars in 2018. A subsequent downward trend occurred over the following two years, reaching a period low of 1,130 million US dollars in 2020. This was followed by a strong recovery in 2021, where EBITDA increased to 3,327 million US dollars.
- Operational Resilience vs. Bottom-Line Volatility
- A marked divergence is observed between EBITDA and net income. In 2017 and 2020, net losses were substantial, amounting to 5,723 million US dollars and 1,451 million US dollars, respectively. Despite these losses, EBITDA remained positive during both years, indicating that the underlying operational activities continued to generate value while non-cash charges, such as depreciation and amortization, or other non-operating expenses heavily impacted net profitability.
- Analysis of EBIT and EBT Fluctuations
- Earnings before interest and tax (EBIT) and earnings before tax (EBT) closely tracked the volatility seen in net income. Both metrics shifted from negative territory in 2017 and 2020 to positive results in 2018, 2019, and 2021. The recovery in 2021 is particularly notable, with EBIT rising from negative 1,186 million US dollars to positive 1,261 million US dollars, aligning with the rebound observed in EBITDA.
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Enterprise Value to EBITDA Ratio, Current
Marathon Oil Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 18,012) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 3,327) |
| Valuation Ratio | |
| EV/EBITDA | 5.41 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Chevron Corp. | 10.80 |
| ConocoPhillips | 6.67 |
| Exxon Mobil Corp. | 10.45 |
| EV/EBITDA, Sector | |
| Oil, Gas & Consumable Fuels | 11.51 |
| EV/EBITDA, Industry | |
| Energy | 11.73 |
Based on: 10-K (reporting date: 2021-12-31).
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
Marathon Oil Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 19,460) | 13,468) | 12,800) | 17,690) | 17,830) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 3,327) | 1,130) | 3,069) | 4,148) | 2,295) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 5.85 | 11.92 | 4.17 | 4.26 | 7.77 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Chevron Corp. | 7.18 | — | — | — | — | |
| ConocoPhillips | 6.34 | — | — | — | — | |
| Exxon Mobil Corp. | 7.07 | — | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 6.97 | — | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Energy | 7.24 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/EBITDA = EV ÷ EBITDA
= 19,460 ÷ 3,327 = 5.85
4 Click competitor name to see calculations.
The financial performance from 2017 to 2021 is characterized by significant volatility in both operational earnings and valuation metrics, resulting in a fluctuating Enterprise Value to EBITDA (EV/EBITDA) ratio.
- Enterprise Value (EV) Trends
- Enterprise Value remained relatively stable between 2017 and 2018, followed by a notable contraction in 2019 to 12,800 million USD. A gradual recovery began in 2020, culminating in a sharp increase to 19,460 million USD by December 31, 2021, representing the highest valuation within the analyzed five-year period.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization exhibited substantial variance. After a peak in 2018 at 4,148 million USD, EBITDA entered a downward trajectory, reaching a period low of 1,130 million USD in 2020. A strong recovery occurred in 2021, with EBITDA rising to 3,327 million USD.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio experienced a downward trend from 7.77 in 2017 to 4.17 in 2019, suggesting either a decrease in valuation multiples or an improvement in operational efficiency relative to enterprise value. However, a significant spike to 11.92 was observed in 2020, primarily driven by the collapse in EBITDA rather than a surge in Enterprise Value. By 2021, the ratio compressed to 5.85, reflecting a normalization as EBITDA recovered and the valuation stabilized.
The correlation between these metrics indicates that the valuation multiple was most sensitive to earnings volatility during 2020, while the 2021 data suggests a return to a more moderate valuation range despite the increase in overall Enterprise Value.
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