Enterprise Value to EBITDA (EV/EBITDA)
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- Income Statement
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2014
- Operating Profit Margin since 2014
- Debt to Equity since 2014
- Price to Sales (P/S) since 2014
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Paycom Software 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).
The financial data indicates consistent growth in the company's profitability measures over the five-year period from 2018 to 2022, with some fluctuations in specific years.
- Net Income
-
Net income showed a general upward trajectory, increasing from $137,065 thousand in 2018 to $281,389 thousand in 2022. There was a notable rise from 2018 to 2019, followed by a decline in 2020. Subsequently, net income rebounded strongly in 2021 and reached its highest level in 2022, reflecting improved profitability.
- Earnings Before Tax (EBT)
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EBT increased from $174,711 thousand in 2018 to $389,578 thousand in 2022. Similar to net income, EBT rose through 2019, declined in 2020, and then experienced significant growth in the following two years. The increase in 2022 was particularly pronounced, indicating enhanced pre-tax earnings capacity.
- Earnings Before Interest and Tax (EBIT)
-
EBIT values closely mirrored EBT trends, starting at $175,477 thousand in 2018 and increasing to $392,114 thousand by 2022. The data suggest stable operational profitability, with improvements after a dip in 2020 and a peak in 2022 exceeding previous highs.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
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EBITDA demonstrated robust growth over the period, rising from $205,134 thousand in 2018 to a substantial $484,813 thousand in 2022. Despite a decrease in 2020, EBITDA expanded significantly in 2021 and 2022, indicating stronger operating cash flow generation while controlling non-cash expenses like depreciation and amortization.
Overall, the financial indicators reveal resilience and growth in profitability after a setback in 2020. The recovery and subsequent increases in all earnings measures suggest operational improvements and favorable market conditions contributing to enhanced financial performance by 2022.
Enterprise Value to EBITDA Ratio, Current
Paycom Software Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2022-12-31).
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
Paycom Software Inc., historical EV/EBITDA calculation, comparison to benchmarks
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).
- Enterprise Value (EV)
- The enterprise value experienced a significant increase from December 31, 2018, to December 31, 2020, rising from approximately $10.21 billion to about $23.06 billion. This was followed by a decline in the subsequent years, decreasing to approximately $18.76 billion in 2021 and further to around $17.42 billion in 2022.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA showed a generally positive trend over the observed period. Starting at approximately $205.1 million at the end of 2018, it increased steadily to about $269.2 million in 2019. A slight decrease was noted in 2020, falling to roughly $239.3 million. However, a notable upward trajectory resumed in 2021 and 2022, reaching $323.2 million and peaking at $484.8 million, respectively.
- EV/EBITDA Ratio
- The EV/EBITDA ratio fluctuated considerably across the years. Initially, the ratio was 49.75 in 2018, increasing sharply to 64.58 in 2019 and further to a peak of 96.37 in 2020. Subsequently, it declined markedly to 58.06 in 2021 and continued to fall to 35.93 in 2022, indicating an improvement in valuation relative to EBITDA in the later years.
- Overall Financial Trends and Insights
- From 2018 to 2020, enterprise value grew substantially, reaching its highest point in 2020. During the same period, EBITDA showed a minor setback in 2020 after continuous growth. The pronounced increase in the EV/EBITDA ratio in 2019 and 2020 suggests the enterprise was priced at a higher multiple relative to earnings, potentially reflecting market optimism or valuation expansion despite the EBITDA dip.
- In contrast, the period from 2020 to 2022 was characterized by a decline in enterprise value paired with robust EBITDA growth, particularly in 2022. The resulting decrease in the EV/EBITDA ratio suggests a market revaluation with the company becoming relatively more attractive based on earnings, potentially indicating improved operational efficiency or earnings quality.