Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Royal Caribbean Cruises Ltd., EBITDA calculation
US$ in thousands
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).
- Net Income (Loss) Attributable to Royal Caribbean Cruises Ltd.
- From 2017 to 2019, there was a consistent increase in net income, rising from approximately $1.63 billion to $1.88 billion. However, in 2020 and 2021, the company experienced significant net losses of about $5.8 billion and $5.3 billion respectively, indicating a sharp reversal in profitability due to external or operational challenges.
- Earnings Before Tax (EBT)
- EBT values followed a similar trend to net income. There was steady growth from 2017 through 2019, increasing from approximately $1.64 billion to $1.94 billion. This was followed by a drastic fall into negative territory in 2020 and 2021, with substantial losses exceeding $5.3 billion in both years. This trend aligns with the net income trajectory, suggesting increased operational difficulties impacting taxable earnings.
- Earnings Before Interest and Tax (EBIT)
- EBIT showed a positive growth trend from 2017 to 2019, moving upwards from about $1.94 billion to $2.35 billion. In 2020 and 2021, EBIT turned negative with losses of approximately $4.9 billion and $4.0 billion respectively. Despite being less negative than net income and EBT losses, the significant decline indicates the impact of core operating challenges before financing and tax considerations.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA consistently grew from 2017 to 2019, increasing from roughly $2.89 billion to $3.59 billion, reflecting expansion and improved operational cash flow. The years 2020 and 2021 saw a reversal with EBITDA becoming negative at approximately $3.7 billion and $2.7 billion outages. This suggests that even cash-generating operations were heavily impacted, revealing severe disruptions to core business activities.
- Summary of Trends
- The financial data reveals a strong growth trajectory in profitability and earnings metrics from 2017 through 2019. All indicators – net income, EBT, EBIT, and EBITDA – increased steadily in this period, reflecting improving financial performance. However, a significant and abrupt downturn occurred in 2020 and 2021 across all measures, with large negative figures indicating substantial losses. These patterns imply an extraordinary event or crisis affecting the company’s operations, profitability, and cash generation capacity sharply in the latter two years under review.
Enterprise Value to EBITDA Ratio, Current
Royal Caribbean Cruises Ltd., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 28,261,911) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | (2,721,068) |
| Valuation Ratio | |
| EV/EBITDA | — |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Airbnb Inc. | 20.52 |
| Booking Holdings Inc. | 17.72 |
| Chipotle Mexican Grill Inc. | 17.16 |
| DoorDash, Inc. | 136.50 |
| McDonald’s Corp. | 17.97 |
| Starbucks Corp. | 14.61 |
| EV/EBITDA, Sector | |
| Consumer Services | 31.45 |
| EV/EBITDA, Industry | |
| Consumer Discretionary | 30.25 |
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
Royal Caribbean Cruises Ltd., 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 thousands) | ||||||
| Enterprise value (EV)1 | 37,174,624) | 37,799,471) | 29,507,089) | 35,786,782) | 35,324,272) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | (2,721,068) | (3,666,638) | 3,594,655) | 3,204,061) | 2,894,609) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | — | — | 8.21 | 11.17 | 12.20 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Airbnb Inc. | 338.63 | — | — | — | — | |
| Booking Holdings Inc. | 45.39 | 73.17 | — | — | — | |
| Chipotle Mexican Grill Inc. | 40.00 | 79.87 | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | 17.49 | 21.03 | — | — | — | |
| Starbucks Corp. | 18.77 | 38.99 | 17.27 | — | — | |
| EV/EBITDA, Sector | ||||||
| Consumer Services | 27.18 | 65.84 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Consumer Discretionary | 21.51 | 29.73 | — | — | — | |
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
= 37,174,624 ÷ -2,721,068 = —
4 Click competitor name to see calculations.
- Enterprise value (EV)
- The enterprise value exhibits fluctuations over the analyzed period. It initially increases slightly from approximately 35.3 billion in 2017 to around 35.8 billion in 2018, followed by a noticeable decline to roughly 29.5 billion in 2019. Subsequently, there is a sharp rise, reaching nearly 37.8 billion in 2020, before a mild decrease to about 37.2 billion in 2021. This pattern suggests varying market perceptions or operational impacts affecting the company’s valuation throughout these years.
- Earnings before interest, tax, depreciation and amortization (EBITDA)
- EBITDA shows an increasing trend from 2017 to 2019, rising from approximately 2.9 billion to 3.6 billion, indicating improving operational performance or profitability during that timeframe. However, there is a dramatic reversal in 2020 with EBITDA plunging to a significant negative value of roughly -3.7 billion and remaining negative in 2021 at about -2.7 billion. This steep decline likely reflects adverse events or operational disruptions impacting earnings.
- EV/EBITDA ratio
- The EV/EBITDA ratio decreases consecutively from 12.2 in 2017 to 11.17 in 2018 and further down to 8.21 in 2019, indicating increasing EBITDA relative to enterprise value and possibly improved valuation attractiveness or operational efficiency. However, no ratio values are reported for 2020 and 2021, likely due to the EBITDA turning negative during these years, rendering the ratio not meaningful or uncalculated.