Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Nike Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
The financial performance over the six-year period exhibits notable fluctuations and overall growth patterns in key profitability metrics.
- Net Income
- Net income decreased significantly from 2019 to 2020, reflecting a sharp decline in profitability during that period. However, there was a robust recovery in 2021 with net income more than doubling compared to 2020. From 2021 onwards, net income remained relatively stable, showing a slight dip in 2023 before increasing again in 2024. This indicates resilience and recovery following the downturn in 2020.
- Earnings Before Tax (EBT)
- EBT followed a trend similar to net income, with a pronounced drop in 2020 and substantial recovery in 2021. The earnings stabilized in the subsequent years, maintaining a level above that observed in 2019. The continuous increase from 2022 to 2024 suggests improving operational and financial efficiency.
- Earnings Before Interest and Tax (EBIT)
- The EBIT values mirror the trends seen in EBT and net income, showing a decline from 2019 to 2020 and a strong rebound in 2021. The EBIT remained steady in 2022 and experienced a moderate decrease in 2023 before further improvement in 2024. This pattern reflects underlying operational profitability fluctuations, likely influenced by external factors around 2020.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA demonstrated a dip in 2020 but to a lesser extent than other profitability measures, indicating that cash-based earnings retained more stability during that challenging period. Following this, EBITDA showed consistent growth in 2021 and 2022, with a slight reduction in 2023 and recovery by 2024. The data implies sustained operational strength and effective cost management, particularly in non-cash expenses.
Overall, the financial data indicates a clear impact in 2020, likely due to external economic pressures. Recovery and growth in subsequent years highlight the company's resilience. The steadiness in EBITDA relative to other metrics suggests strong operational cash flow despite volatility in earnings affected by taxation and amortization. The incremental improvements from 2022 to 2024 across all metrics point to a progressive return to stability and profitability enhancement.
Enterprise Value to EBITDA Ratio, Current
Nike Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 102,181) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 7,813) |
| Valuation Ratio | |
| EV/EBITDA | 13.08 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| lululemon athletica inc. | 8.76 |
| EV/EBITDA, Sector | |
| Consumer Durables & Apparel | 12.39 |
| EV/EBITDA, Industry | |
| Consumer Discretionary | 19.15 |
Based on: 10-K (reporting date: 2024-05-31).
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
Nike Inc., historical EV/EBITDA calculation, comparison to benchmarks
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 104,396) | 162,776) | 171,515) | 248,616) | 154,410) | 134,665) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 7,813) | 7,351) | 7,790) | 7,754) | 4,157) | 5,652) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 13.36 | 22.14 | 22.02 | 32.06 | 37.14 | 23.83 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| lululemon athletica inc. | 22.74 | 24.36 | 27.43 | 39.99 | 23.64 | — | |
| EV/EBITDA, Sector | |||||||
| Consumer Durables & Apparel | 15.67 | 22.55 | 22.92 | 32.97 | 34.40 | — | |
| EV/EBITDA, Industry | |||||||
| Consumer Discretionary | 20.66 | 18.14 | 19.78 | 21.32 | 29.33 | — | |
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 104,396 ÷ 7,813 = 13.36
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited variability over the analyzed periods. It increased substantially from 134,665 million USD in 2019 to a peak of 248,616 million USD in 2021. After this peak, a notable decline was observed, with the EV decreasing to 171,515 million USD in 2022, 162,776 million USD in 2023, and further down to 104,396 million USD by 2024.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA experienced fluctuations during the period reviewed. It decreased from 5,652 million USD in 2019 to 4,157 million USD in 2020, likely reflecting operational challenges. However, a strong recovery occurred from 2020 to 2021, with EBITDA rising sharply to 7,754 million USD. Stability in performance is evident as EBITDA remained relatively consistent in 2022 (7,790 million USD) and 2023 (7,351 million USD), followed by a slight increase to 7,813 million USD in 2024.
- EV/EBITDA Ratio
- The EV/EBITDA ratio highlights a decreasing valuation multiple trend over time. Starting at 23.83 in 2019, the ratio increased to 37.14 in 2020, possibly due to a combination of decreasing EBITDA and rising enterprise value. From 2020 onwards, a consistent downward trend is observable, with ratios falling to 32.06 in 2021, 22.02 in 2022, 22.14 in 2023, and significantly decreasing to 13.36 in 2024. This suggests that the company was valued more moderately relative to its EBITDA in recent periods, potentially indicating improved operational earnings relative to market valuation.