Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Roper Technologies Inc., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 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).
Operational performance, as measured by EBITDA, experienced a period of significant growth between 2018 and 2019, followed by a correction and subsequent stabilization. While EBITDA peaked in 2019, the trailing years indicate a plateau in core operational earnings, contrasting sharply with the volatility observed in net earnings during the same period.
- EBITDA Trend Analysis
- EBITDA grew from US$ 1,747,500 thousand in 2018 to a peak of US$ 2,830,000 thousand in 2019. A notable decline occurred in 2020, where figures dropped to US$ 1,949,000 thousand. Since 2020, the metric has remained relatively stable, recording US$ 2,139,200 thousand in 2021 and US$ 2,124,500 thousand in 2022.
- Operating Efficiency and D&A Impact
- A widening gap is observed between EBIT and EBITDA over the five-year period. Depreciation and amortization expenses increased steadily from US$ 367,000 thousand in 2018 to US$ 650,100 thousand in 2022. This upward trend suggests an expanding asset base or increased amortization related to acquisitions, which has put downward pressure on EBIT relative to EBITDA.
- Divergence Between Operational and Net Earnings
- A significant anomaly is present in the 2022 fiscal year. While EBITDA and EBIT remained nearly flat compared to 2021, net earnings surged to US$ 4,544,700 thousand, a substantial increase from the US$ 1,152,600 thousand reported in the prior year. This divergence indicates that the increase in net profitability for 2022 was driven by non-operating items, tax adjustments, or one-time gains rather than improvements in core operational performance.
- Earnings Stability Profile
- The correlation between EBT, EBIT, and EBITDA remained consistent from 2018 through 2021, suggesting a stable cost structure. However, the breakdown of this correlation in 2022 highlights a shift where net bottom-line results were decoupled from operational earnings (EBITDA).
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Enterprise Value to EBITDA Ratio, Current
Roper Technologies Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 58,644,366) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,124,500) |
| Valuation Ratio | |
| EV/EBITDA | 27.60 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Apple Inc. | 34.26 |
| Arista Networks Inc. | 57.54 |
| Cisco Systems Inc. | 21.75 |
| Dell Technologies Inc. | 30.44 |
| Lumentum Holdings Inc. | — |
| Super Micro Computer Inc. | 10.75 |
| EV/EBITDA, Sector | |
| Technology Hardware & Equipment | 37.17 |
| EV/EBITDA, Industry | |
| Information Technology | 54.65 |
Based on: 10-K (reporting date: 2022-12-31).
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
Roper Technologies Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 51,446,203) | 53,952,121) | 49,546,610) | 41,884,369) | 37,664,445) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,124,500) | 2,139,200) | 1,949,000) | 2,830,000) | 1,747,500) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 24.22 | 25.22 | 25.42 | 14.80 | 21.55 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Apple Inc. | 19.15 | 20.47 | 23.12 | — | — | |
| Arista Networks Inc. | 24.52 | 37.29 | — | — | — | |
| Cisco Systems Inc. | 10.52 | 15.05 | — | — | — | |
| Dell Technologies Inc. | 4.85 | 9.32 | — | — | — | |
| Lumentum Holdings Inc. | 11.47 | 7.83 | — | — | — | |
| Super Micro Computer Inc. | 10.50 | 11.19 | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Technology Hardware & Equipment | 17.24 | 19.12 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Information Technology | 18.32 | 20.52 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 51,446,203 ÷ 2,124,500 = 24.22
4 Click competitor name to see calculations.
The analysis of the valuation metrics from 2018 to 2022 reveals a period of significant volatility followed by a stabilization at a higher valuation multiple. While the enterprise value grew steadily for the majority of the period, the underlying EBITDA exhibited fluctuations that heavily influenced the resulting EV/EBITDA ratio.
- Enterprise Value Progression
- A consistent growth trend in enterprise value was observed from 2018 through 2021, rising from 37.66 billion to a peak of 53.95 billion. This upward trajectory was interrupted in 2022, where a slight contraction brought the value to 51.45 billion.
- EBITDA Volatility
- Earnings before interest, tax, depreciation, and amortization showed an inconsistent pattern. A significant surge occurred in 2019, reaching 2.83 billion, which was immediately followed by a sharp decline to 1.95 billion in 2020. For the remainder of the period, EBITDA remained relatively stagnant, fluctuating narrowly between 2.12 billion and 2.14 billion.
- EV/EBITDA Ratio Interpretation
- The valuation multiple reached its lowest point in 2019 at 14.80, directly correlating with the spike in EBITDA. Conversely, the ratio surged to its peak of 25.42 in 2020, driven by the simultaneous increase in enterprise value and the contraction of EBITDA. Between 2020 and 2022, the ratio remained elevated and stable, fluctuating between 24.22 and 25.42, indicating that the market maintained a consistently higher premium relative to earnings power during these years.
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