Enterprise Value to EBITDA (EV/EBITDA)
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
RH, EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-01-28), 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).
- Net Income
- The net income shows substantial growth from 2018 to 2022, rising from 2.18 million to a peak of approximately 688.5 million US dollars. However, in 2023 there is a noticeable decline to around 528.6 million, indicating a decrease in profitability compared to the previous year.
- Earnings Before Tax (EBT)
- EBT follows a similar upward trend as net income from 2018 through 2022, increasing from about 30.1 million to over 822.1 million US dollars. This figure then sharply decreases in 2023 to around 437.3 million, which suggests significant changes affecting earnings before tax in the last year of the period analyzed.
- Earnings Before Interest and Tax (EBIT)
- EBIT consistently rises over the years, from 93.2 million in 2018 to a peak of 889.0 million in 2022. In 2023, EBIT declines to 589.0 million, which, while still high compared to earlier years, represents a reduction in operating profitability from the previous peak.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- The EBITDA figures demonstrate strong growth over the analyzed years, moving from about 163.4 million in 2018 to the highest level of 985.0 million in 2022. In 2023, EBITDA decreases notably to approximately 697.6 million, reflecting a reduction in core earnings before accounting for non-cash expenses.
- Overall Trend and Insights
- The data indicates a period of robust financial growth from 2018 through 2022 across all key profitability metrics. The sharp increases in net income, EBT, EBIT, and EBITDA suggest effective operational performance and expanding earnings. However, the decline seen in 2023 across these items points to potential challenges faced in the most recent year, impacting overall profitability and earnings capacity. This trend could warrant further examination into the factors contributing to the downturn, such as cost increases, revenue pressures, or one-time events.
Enterprise Value to EBITDA Ratio, Current
RH, 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, Competitors1 | |
| Amazon.com Inc. | |
| Home Depot Inc. | |
| Lowe’s Cos. Inc. | |
| TJX Cos. Inc. | |
| EV/EBITDA, Sector | |
| Consumer Discretionary Distribution & Retail | |
| EV/EBITDA, Industry | |
| Consumer Discretionary | |
Based on: 10-K (reporting date: 2023-01-28).
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
RH, historical EV/EBITDA calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | |||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | |||||||
| Valuation Ratio | |||||||
| EV/EBITDA3 | |||||||
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| EV/EBITDA, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| EV/EBITDA, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2023-01-28), 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).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- Over the six-year period, the enterprise value exhibited significant fluctuations. From 2018 to 2020, EV increased steadily from approximately 2.9 billion USD to 3.55 billion USD. A notable surge occurred in 2021, with EV rising sharply to over 13.6 billion USD. This was followed by a pronounced decline over the next two years, descending to approximately 7.9 billion USD in 2022 and further to 7.1 billion USD in 2023. Overall, the pattern indicates a peak in 2021 after which the company experienced a reduction in its enterprise valuation.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA showed a consistent upward trend from 2018 through 2022, advancing from roughly 163 million USD to a high of approximately 985 million USD. The increase was relatively steady year-on-year, though the growth accelerated notably between 2020 and 2022. In 2023, however, EBITDA declined to about 698 million USD, indicating a reduction in operating profitability compared to the prior year. Despite this decrease, EBITDA remained significantly higher than values observed in 2018 and 2019.
- EV/EBITDA Ratio
- The EV/EBITDA ratio fluctuated considerably across the years, reflecting variations in both enterprise value and operating earnings. Initially, there was a notable decrease from 17.79 in 2018 to 7.74 in 2020, driven by rising EBITDA and moderately increasing EV. A marked increase occurred in 2021, where the ratio jumped to 24.86, coinciding with a sharp rise in EV that outpaced EBITDA growth. This ratio then declined significantly to 8.02 in 2022 before a modest increase to 10.13 in 2023. These changes suggest periods of different valuation perspectives relative to the company's earnings, with 2021 representing a year of high valuation multiples relative to operating earnings.
- Overall Insights
- The data reveals periods of rapid growth in both EBITDA and enterprise value, particularly evident up to 2021, followed by a contraction phase. The EV/EBITDA ratio reflects shifts in market valuation assessments, peaking sharply in 2021 and then normalizing closer to prior-year levels. The decline in both EV and EBITDA after 2021 may indicate challenges impacting the company’s valuation and profitability, while the variations in EV/EBITDA highlight changing investor sentiment or market conditions affecting relative valuation metrics.