Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Twitter Inc., 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).
An analysis of financial performance from 2017 to 2021 reveals a period of significant volatility, characterized by a peak in operational profitability in 2019 followed by a consistent downward trend. While the company maintained a positive EBITDA throughout the five-year period, other profitability markers, including Net Income and EBIT, experienced substantial fluctuations and eventual deterioration.
- EBITDA Trajectory
- EBITDA exhibited strong growth in the early part of the period, rising from 405,686 thousand in 2017 to a peak of 993,868 thousand in 2019. However, this growth was not sustained, as EBITDA declined to 597,116 thousand in 2020 and further dropped to 184,921 thousand by the end of 2021, representing a significant contraction from its 2019 high.
- Net Income Volatility
- Net income demonstrated extreme instability. After an initial loss in 2017, the company achieved substantial profitability in 2018 and 2019, with a peak of 1,465,659 thousand. This trend reversed sharply in 2020 with a loss of 1,135,626 thousand, followed by a continuing, though smaller, loss of 221,409 thousand in 2021.
- Operating Income and Non-Cash Charges
- A notable divergence is observed between EBIT and EBITDA. In 2021, EBIT turned negative at -359,927 thousand, despite EBITDA remaining positive. This indicates that depreciation and amortization expenses exceeded the operational earnings generated during that fiscal year, highlighting a shift in the operational cost structure.
- Earnings Before Tax (EBT) Trends
- EBT mirrored the volatility of net income, moving from a deficit in 2017 to a peak of 423,544 thousand in 2018. A subsequent decline led to an EBT loss of 50,939 thousand in 2020 and a more pronounced loss of 411,113 thousand in 2021, confirming a general decline in pre-tax profitability over the final two years of the analyzed period.
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Enterprise Value to EBITDA Ratio, Current
Twitter Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 27,964,121) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 184,921) |
| Valuation Ratio | |
| EV/EBITDA | 151.22 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Alphabet Inc. | 21.05 |
| Comcast Corp. | 3.67 |
| Meta Platforms Inc. | 15.33 |
| Netflix Inc. | 9.12 |
| Walt Disney Co. | 12.30 |
| EV/EBITDA, Sector | |
| Media & Entertainment | 27.18 |
| EV/EBITDA, Industry | |
| Communication Services | 19.10 |
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
Twitter Inc., 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 | 26,874,573) | 53,314,370) | 26,222,699) | 20,098,812) | 21,915,185) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 184,921) | 597,116) | 993,868) | 981,648) | 405,686) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 145.33 | 89.29 | 26.38 | 20.47 | 54.02 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Alphabet Inc. | 18.08 | — | — | — | — | |
| Comcast Corp. | 8.45 | — | — | — | — | |
| Meta Platforms Inc. | 10.85 | — | — | — | — | |
| Netflix Inc. | 9.51 | — | — | — | — | |
| Walt Disney Co. | 34.53 | 60.13 | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Media & Entertainment | 14.62 | — | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Communication Services | 11.57 | — | — | — | — | |
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
= 26,874,573 ÷ 184,921 = 145.33
4 Click competitor name to see calculations.
The financial trajectory between 2017 and 2021 is characterized by a significant divergence between enterprise valuation and operational profitability, resulting in an escalating valuation multiple over the observed period.
- Enterprise Value Trends
- Enterprise value exhibited substantial volatility, starting at approximately 21.9 billion USD in 2017 and reaching a peak of 53.3 billion USD in 2020. By the end of 2021, the value corrected significantly to 26.9 billion USD, returning to levels similar to those seen in 2019.
- EBITDA Performance
- Operational earnings showed a period of growth and subsequent contraction. EBITDA increased from 405.7 million USD in 2017 to a peak of 993.9 million USD in 2019. However, a sharp downward trend followed, with earnings falling to 597.1 million USD in 2020 and further declining to 184.9 million USD by 2021, indicating a severe erosion of operational profitability.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio shifted from a high of 54.02 in 2017 to a period low of 20.47 in 2018. From 2019 onward, a pattern of aggressive expansion occurred; the ratio rose to 89.29 in 2020 and culminated in 145.33 in 2021. This trajectory reflects a decoupling of market valuation from earnings, where the multiple expanded exponentially as EBITDA decreased, suggesting that the enterprise valuation became increasingly detached from current operational performance.
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