Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Merck & Co. Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial performance indicators demonstrate a fluctuating pattern over the five-year period. A significant decline in key earnings metrics is observed in 2023, followed by substantial recoveries in both 2024 and 2025. The analysis focuses on the trends in net income attributable to Merck & Co., Inc., earnings before tax (EBT), earnings before interest and tax (EBIT), and earnings before interest, tax, depreciation and amortization (EBITDA).
- Overall Earnings Trend
- Net income attributable to Merck & Co., Inc. increased from US$13,049 million in 2021 to US$14,519 million in 2022. However, it experienced a dramatic decrease to US$365 million in 2023 before rebounding to US$17,117 million in 2024 and further increasing to US$18,254 million in 2025. This volatility suggests significant underlying factors impacting profitability.
- EBT and EBIT Performance
- Earnings before tax (EBT) mirrored the trend in net income, rising from US$13,879 million in 2021 to US$16,444 million in 2022, then falling sharply to US$1,889 million in 2023. Subsequent recoveries were noted in 2024 (US$19,936 million) and 2025 (US$21,067 million). A similar pattern is evident in earnings before interest and tax (EBIT), moving from US$14,685 million in 2021 to US$17,406 million in 2022, declining to US$3,035 million in 2023, and then increasing to US$21,207 million in 2024 and US$22,424 million in 2025.
- EBITDA Analysis
- Earnings before interest, tax, depreciation and amortization (EBITDA) followed the same general trend as the other earnings metrics. It increased from US$17,899 million in 2021 to US$21,315 million in 2022, experienced a substantial decline to US$6,907 million in 2023, and then recovered significantly to US$25,706 million in 2024 and US$28,262 million in 2025. The magnitude of the 2023 decline in EBITDA was considerable, indicating a substantial impact from factors not related to depreciation, amortization, interest, or taxes.
The consistent correlation between all four earnings measures suggests that the fluctuations are driven by common underlying factors. The sharp downturn in 2023 warrants further investigation to determine the root causes, while the subsequent recoveries in 2024 and 2025 indicate successful mitigation strategies or favorable market conditions. The increasing trend in both EBT and EBITDA from 2024 to 2025 suggests improving operational efficiency and profitability.
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Enterprise Value to EBITDA Ratio, Current
Merck & Co. Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 322,542) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 28,262) |
| Valuation Ratio | |
| EV/EBITDA | 11.41 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| AbbVie Inc. | 24.11 |
| Amgen Inc. | 13.81 |
| Bristol-Myers Squibb Co. | 9.94 |
| Danaher Corp. | 21.34 |
| Eli Lilly & Co. | 30.99 |
| Gilead Sciences Inc. | 13.89 |
| Johnson & Johnson | 14.49 |
| Pfizer Inc. | 12.20 |
| Regeneron Pharmaceuticals Inc. | 12.46 |
| Thermo Fisher Scientific Inc. | 18.44 |
| Vertex Pharmaceuticals Inc. | 22.08 |
| EV/EBITDA, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 17.12 |
| EV/EBITDA, Industry | |
| Health Care | 16.55 |
Based on: 10-K (reporting date: 2025-12-31).
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
Merck & Co. Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 341,234) | 254,436) | 354,322) | 296,532) | 217,996) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 28,262) | 25,706) | 6,907) | 21,315) | 17,899) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 12.07 | 9.90 | 51.30 | 13.91 | 12.18 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| AbbVie Inc. | 26.08 | 26.97 | 20.79 | 13.31 | 13.44 | |
| Amgen Inc. | 14.47 | 15.31 | 14.13 | 12.97 | 13.22 | |
| Bristol-Myers Squibb Co. | 10.28 | 48.23 | 6.51 | 9.46 | 8.65 | |
| Danaher Corp. | 23.29 | 22.34 | 26.41 | 18.42 | 21.05 | |
| Eli Lilly & Co. | 35.45 | 55.99 | 85.35 | 37.76 | 29.86 | |
| Gilead Sciences Inc. | 14.76 | 35.86 | 10.41 | 13.89 | 8.57 | |
| Johnson & Johnson | 14.82 | 15.77 | 16.45 | 14.78 | 14.47 | |
| Pfizer Inc. | 12.25 | 10.60 | 22.50 | 6.12 | 8.64 | |
| Regeneron Pharmaceuticals Inc. | 13.07 | 13.55 | 20.16 | 15.27 | 6.68 | |
| Thermo Fisher Scientific Inc. | 19.40 | 19.89 | 21.83 | 20.25 | 20.21 | |
| Vertex Pharmaceuticals Inc. | 24.32 | 231.93 | 21.57 | 14.91 | 18.92 | |
| EV/EBITDA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 18.39 | 22.07 | 22.59 | 13.58 | 13.16 | |
| EV/EBITDA, Industry | ||||||
| Health Care | 17.72 | 21.03 | 20.27 | 14.00 | 14.33 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/EBITDA = EV ÷ EBITDA
= 341,234 ÷ 28,262 = 12.07
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA ratio exhibits considerable fluctuation over the observed five-year period. Initial values indicate a relatively stable ratio, followed by a significant increase and subsequent decline, concluding with a return towards initial levels.
- Enterprise Value to EBITDA – Overall Trend
- The ratio begins at 12.18 in 2021 and increases to 13.91 in 2022, suggesting a moderate increase in enterprise value relative to EBITDA. A substantial jump occurs in 2023, with the ratio reaching 51.30. This indicates a significant increase in enterprise value compared to EBITDA, potentially due to factors such as increased debt, a higher market valuation, or a substantial decrease in EBITDA. The ratio then experiences a dramatic decrease in 2024, falling to 9.90, implying a considerable improvement in EBITDA relative to enterprise value. The ratio stabilizes somewhat in 2025, increasing to 12.07, approaching the initial value observed in 2021.
- Enterprise Value
- Enterprise Value increased from US$217,996 million in 2021 to US$296,532 million in 2022, and further to US$354,322 million in 2023. A decrease is then observed in 2024, falling to US$254,436 million, before rising again to US$341,234 million in 2025. This suggests periods of expansion and contraction in the company’s total value.
- EBITDA
- EBITDA increased from US$17,899 million in 2021 to US$21,315 million in 2022. A significant decline is then observed in 2023, with EBITDA falling to US$6,907 million. A substantial recovery occurs in 2024, with EBITDA reaching US$25,706 million, and continues to increase in 2025 to US$28,262 million. This indicates considerable volatility in the company’s operational profitability.
The large fluctuation in the EV/EBITDA ratio is primarily driven by the significant changes in EBITDA, particularly the substantial decrease in 2023 and the subsequent recovery in 2024 and 2025. The enterprise value also contributes to the ratio’s movement, though to a lesser extent.
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