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).
Between 2017 and 2019, the company experienced a period of consistent growth in operational and net profitability. This positive trajectory was abruptly reversed in 2020, resulting in substantial losses across all financial metrics. While 2021 indicated a slight moderation in these losses, the company remained in a significantly negative financial position relative to pre-2020 levels.
- Earnings before interest, tax, depreciation and amortization (EBITDA)
- EBITDA showed a steady upward trend from 2017 to 2019, rising from 2.89 billion USD to 3.59 billion USD. This growth was followed by a severe contraction in 2020, where EBITDA fell to negative 3.67 billion USD. A marginal recovery occurred in 2021, with the figure improving to negative 2.72 billion USD, though it remained far below the 2019 peak.
- Operating Profitability (EBIT)
- Earnings before interest and tax followed a pattern mirrored by EBITDA, increasing annually to reach 2.35 billion USD by the end of 2019. A sharp decline was observed in 2020, with EBIT dropping to negative 4.95 billion USD. By 2021, the loss narrowed slightly to negative 4.01 billion USD.
- Net Income and EBT
- Net income and earnings before tax grew incrementally from 2017 through 2019, with net income peaking at 1.88 billion USD. The transition to 2020 marked a critical downturn, with net income plummeting to a loss of 5.80 billion USD. The loss persisted into 2021 at 5.26 billion USD, indicating that the recovery of the bottom line was slower than the recovery observed in operational metrics like EBITDA.
- Comparative Loss Analysis
- The magnitude of the net loss in 2020 and 2021 significantly exceeded the EBITDA loss for the same periods. This divergence suggests that non-operating expenses, such as interest payments and tax adjustments, exerted substantial downward pressure on the final net results during the period of operational distress.
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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. | 28.74 |
| Booking Holdings Inc. | 14.00 |
| Chipotle Mexican Grill Inc. | 18.44 |
| DoorDash, Inc. | 44.71 |
| McDonald’s Corp. | 16.24 |
| Starbucks Corp. | 27.72 |
| EV/EBITDA, Sector | |
| Consumer Services | 30.52 |
| EV/EBITDA, Industry | |
| Consumer Discretionary | 29.31 |
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 | — | — | — | — | |
| Chipotle Mexican Grill Inc. | 40.00 | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | 17.49 | — | — | — | — | |
| Starbucks Corp. | 18.77 | 38.99 | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Consumer Services | 27.18 | — | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Consumer Discretionary | 21.51 | — | — | — | — | |
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.
The financial trajectory between 2017 and 2021 is characterized by a period of operational growth and valuation compression followed by a severe contraction in profitability. While the enterprise value remained relatively resilient across the five-year period, the earnings capacity experienced a dramatic reversal starting in 2020.
- Enterprise Value Trends
- Enterprise value exhibited relative stability between 2017 and 2018, followed by a decrease to 29.51 billion USD in 2019. A notable increase occurred in 2020, with the value rising to 37.80 billion USD, before slightly moderating to 37.17 billion USD in 2021.
- EBITDA Performance and Volatility
- A consistent upward trend in EBITDA was observed from 2017 to 2019, rising from 2.89 billion USD to 3.59 billion USD. This growth phase was abruptly terminated in 2020, when EBITDA shifted to a negative 3.67 billion USD. A slight improvement was noted in 2021, although earnings remained negative at 2.72 billion USD.
- EV/EBITDA Ratio Analysis
- From 2017 to 2019, the EV/EBITDA ratio demonstrated a significant downward trend, falling from 12.20 to 8.21. This contraction suggests that EBITDA growth outpaced the growth of enterprise value during this window. For the 2020 and 2021 fiscal years, the ratio is not applicable due to the transition to negative EBITDA, reflecting a period of operational distress where valuation could no longer be benchmarked against positive earnings.
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