Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Ross Stores Inc., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
- Net Earnings
- Net earnings showed a generally increasing trend from 2017 through 2019, rising from approximately $1.12 billion to $1.59 billion. This upward trajectory continued into 2020 with earnings reaching about $1.66 billion. However, a significant decline occurred in 2021, where net earnings dropped sharply to approximately $85.4 million. This decline was followed by a strong recovery in 2022, with net earnings rebounding to about $1.72 billion, the highest level in the six-year span.
- Earnings Before Tax (EBT)
- EBT steadily increased from around $1.79 billion in 2017 to $2.05 billion in 2019, showing moderate growth year-over-year. The upward trend persisted into 2020 with EBT reaching approximately $2.16 billion. Similar to net earnings, there was a substantial decrease in 2021, where EBT fell sharply to approximately $106.3 million. This was followed by a recovery in 2022, with EBT increasing to about $2.26 billion, exceeding previous highs.
- Earnings Before Interest and Tax (EBIT)
- EBIT rose consistently from about $1.81 billion in 2017 to approximately $2.07 billion in 2019. This growth continued into 2020 with EBIT around $2.17 billion. In 2021, EBIT experienced a noteworthy drop to approximately $194.4 million. The next year saw a recovery and strong performance, reaching around $2.33 billion in 2022, the highest in the observed period.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA increased steadily each year from approximately $2.11 billion in 2017 to about $2.40 billion in 2019. It further climbed to nearly $2.52 billion in 2020. In 2021, however, EBITDA declined sharply to around $558.6 million. This was followed by a recovery and increase in 2022, reaching approximately $2.69 billion, the highest EBITDA value in the timeline.
- Overall Analysis
- The financial data indicates a general pattern of growth in profitability measures from 2017 through 2020. Across all key earnings indicators—net earnings, EBT, EBIT, and EBITDA—the company demonstrated consistent improvement. The year 2021 represents an anomaly, with all earning metrics plummeting sharply. This decline is pronounced and affects all levels of earnings, hinting at an extraordinary event or operational disruption during that period. The subsequent year, 2022, shows a robust rebound surpassing previous performance levels, suggesting recovery and restoration of business operations and profitability. This cyclical pattern highlights resilience while emphasizing the importance of the factors influencing the 2021 downturn.
Enterprise Value to EBITDA Ratio, Current
Ross Stores Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 37,256,600) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,694,365) |
| Valuation Ratio | |
| EV/EBITDA | 13.83 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Amazon.com Inc. | 18.81 |
| Home Depot Inc. | 16.60 |
| Lowe’s Cos. Inc. | 12.79 |
| TJX Cos. Inc. | 17.75 |
| EV/EBITDA, Sector | |
| Consumer Discretionary Distribution & Retail | 36.71 |
| EV/EBITDA, Industry | |
| Consumer Discretionary | 31.18 |
Based on: 10-K (reporting date: 2022-01-29).
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
Ross Stores Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 31,057,736) | 40,612,073) | 29,914,033) | 33,426,368) | 27,964,120) | 25,059,838) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,694,365) | 558,606) | 2,524,920) | 2,397,640) | 2,372,730) | 2,108,240) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 11.53 | 72.70 | 11.85 | 13.94 | 11.79 | 11.89 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Amazon.com Inc. | 28.04 | 21.27 | 32.24 | — | — | — | |
| Home Depot Inc. | 14.08 | 16.53 | 12.34 | — | — | — | |
| Lowe’s Cos. Inc. | 12.43 | 14.41 | 8.98 | — | — | — | |
| TJX Cos. Inc. | 13.00 | 65.35 | 10.33 | — | — | — | |
| EV/EBITDA, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 20.13 | 20.16 | 24.23 | — | — | — | |
| EV/EBITDA, Industry | |||||||
| Consumer Discretionary | 19.78 | 21.32 | 29.33 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 31,057,736 ÷ 2,694,365 = 11.53
4 Click competitor name to see calculations.
The analysis of the annual financial data reveals several notable trends. Enterprise value (EV) demonstrated an overall upward trajectory from the 2017 fiscal year through 2021, increasing from approximately $25.1 billion to over $40.6 billion. However, in the most recent year, there is a significant reduction to about $31.1 billion, suggesting a notable decline after reaching a peak.
Earnings before interest, tax, depreciation, and amortization (EBITDA) exhibited generally positive growth over the period from 2017 to 2020, rising steadily from approximately $2.11 billion to $2.52 billion. A substantial drop is observed in 2021, where EBITDA fell sharply to $558.6 million, representing a severe contraction in operating earnings. This is followed by a recovery in 2022, moving back up to approximately $2.69 billion, which marks the highest level in the examined timeframe.
The EV/EBITDA ratio also shows considerable variability across the years. From 2017 to 2020, the ratio remained relatively stable in the range of roughly 11.8 to 13.9, indicating a consistent valuation multiple relative to the company's operating earnings. In 2021, the ratio surged dramatically to 72.7, a clear outlier likely driven by the steep drop in EBITDA rather than a proportional jump in enterprise value. This elevated multiple suggests a temporary market valuation distortion or an abnormal operating performance for that period. By 2022, the ratio returned close to previous historical levels at 11.53, consistent with the rebound in EBITDA.
In summary, the data reflects a company that experienced steady growth in enterprise value and earnings up until 2020, followed by a sharp setback in 2021 which significantly impacted operating profitability and valuation metrics. The subsequent recovery in 2022 points to a re-establishment of prior financial performance levels. The extreme volatility seen in 2021 EBITDA and the EV/EBITDA ratio should be carefully considered in any forward-looking financial evaluation or strategic planning.