Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
UnitedHealth Group Inc., EBITDA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
The financial data for UnitedHealth Group Inc. over the period from 2020 to 2024 reveals several noteworthy patterns and fluctuations in key earnings metrics.
- Net Earnings Attributable to Common Shareholders
- The net earnings display a rising trend from 2020 to 2023, increasing from 15,403 million USD in 2020 to a peak of 22,381 million USD in 2023. However, in 2024, there is a significant decline to 14,405 million USD, marking a notable reduction of approximately 36% from the previous year, which interrupts the prior growth pattern.
- Earnings Before Tax (EBT)
- EBT follows a similar trajectory as net earnings, with a consistent upward trend from 20,742 million USD in 2020 to 29,112 million USD in 2023. This is followed by a substantial decrease to 20,071 million USD in 2024, representing a decline of about 31%, aligning with the downturn observed in net earnings.
- Earnings Before Interest and Tax (EBIT)
- EBIT shows a gradual increase each year from 22,405 million USD in 2020, rising steadily to a peak of 32,358 million USD in 2023. In 2024, EBIT decreases to 23,977 million USD, which corresponds to a significant pullback of approximately 26% compared to the previous year, again consistent with the overall downward shift in profitability metrics.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA trends upward from 25,296 million USD in 2020 through to 36,330 million USD in 2023, indicating ongoing improvements in operational cash flow generation. In 2024, EBITDA falls sharply to 28,076 million USD, a reduction of nearly 23%, which, while significant, is somewhat less pronounced than declines seen in net earnings and EBT.
Overall, the data indicates a robust growth phase across all profitability measures from 2020 through 2023, followed by a notable contraction in 2024. This sudden decrease could point to increased costs, reduced revenues, or other operational challenges impacting the company’s financial performance in the most recent year. The fact that EBITDA experienced a less severe decline compared to net earnings and EBT may suggest that non-operational factors such as taxes, interest expenses, or depreciation had a larger negative impact in 2024.
Enterprise Value to EBITDA Ratio, Current
UnitedHealth Group Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 332,401) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 28,076) |
| Valuation Ratio | |
| EV/EBITDA | 11.84 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Abbott Laboratories | 22.22 |
| CVS Health Corp. | 10.19 |
| Elevance Health Inc. | 7.23 |
| Intuitive Surgical Inc. | 60.54 |
| Medtronic PLC | 14.42 |
| EV/EBITDA, Sector | |
| Health Care Equipment & Services | 14.89 |
| EV/EBITDA, Industry | |
| Health Care | 18.70 |
Based on: 10-K (reporting date: 2024-12-31).
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
UnitedHealth Group Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 481,999) | 494,200) | 481,109) | 470,898) | 338,798) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 28,076) | 36,330) | 31,835) | 27,073) | 25,296) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 17.17 | 13.60 | 15.11 | 17.39 | 13.39 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Abbott Laboratories | 22.28 | 19.49 | 15.85 | 17.42 | 25.99 | |
| CVS Health Corp. | 9.86 | 8.03 | 12.42 | 10.41 | 8.56 | |
| Elevance Health Inc. | 8.15 | 10.24 | 10.26 | 10.05 | 7.57 | |
| Intuitive Surgical Inc. | 63.79 | 53.82 | 41.52 | 44.54 | 59.12 | |
| Medtronic PLC | 14.63 | 15.28 | 14.99 | 24.41 | 17.92 | |
| EV/EBITDA, Sector | ||||||
| Health Care Equipment & Services | 16.98 | 14.01 | 14.82 | 16.32 | 14.62 | |
| EV/EBITDA, Industry | ||||||
| Health Care | 20.34 | 19.28 | 13.93 | 14.07 | 17.33 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 481,999 ÷ 28,076 = 17.17
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a significant increase from 2020 to 2021, rising from approximately 338.8 billion USD to 470.9 billion USD. Following this peak, EV showed a moderate upward trend in 2022 and 2023, reaching 494.2 billion USD, before experiencing a slight decline to 482.0 billion USD in 2024. Overall, the enterprise value more than doubled over the five-year period, indicating substantial growth in the company's valuation during the early years, followed by stabilization in the latest year.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA demonstrated a generally increasing trajectory from 25.3 billion USD in 2020 to a peak of 36.3 billion USD in 2023. However, this upward momentum was disrupted in 2024, with EBITDA declining notably to approximately 28.1 billion USD. This decrease in 2024 suggests a reduction in the company's operational profitability or cash generation capabilities after several years of consistent growth.
- EV/EBITDA Ratio
- The EV/EBITDA ratio, reflecting the valuation multiple, varied substantially over the analyzed period. It increased sharply from 13.39 in 2020 to 17.39 in 2021, indicating that the market was pricing the company at a higher multiple relative to its operational earnings. Following this peak, the ratio declined in 2022 to 15.11 and further in 2023 to 13.6, signaling improved operational earnings relative to the enterprise value. However, in 2024, the ratio rose again to 17.17, likely driven by the notable drop in EBITDA despite the relatively stable EV. This fluctuation suggests changing market perceptions of value or operational performance volatility.
- Overall Insights
- The data reveals a pattern of growth in both the enterprise value and EBITDA over the initial years, indicating expanding company size and profitability. Nevertheless, 2024 stands out as an anomalous year with a decrease in EBITDA and a corresponding rise in the EV/EBITDA ratio, which may imply challenges in sustaining earnings growth or market reassessment of the company’s valuation relative to its earnings. Monitoring future performance would be crucial to determine whether the decline in EBITDA is a temporary setback or the beginning of a longer-term trend.