Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
United Rentals Inc., EBITDA calculation
US$ in millions
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).
- Net Income
- Net income demonstrated a generally increasing trend over the five-year period, starting from $1,096 million in 2018 and reaching $2,105 million in 2022. There was a slight dip in 2020 to $890 million, which was followed by a strong recovery and significant increase in subsequent years, culminating in the highest value in 2022.
- Earnings Before Tax (EBT)
- EBT followed a similar pattern to net income. It started at $1,476 million in 2018 and experienced a drop in 2020 to $1,139 million. After 2020, EBT surged notably to $2,802 million in 2022, showing an overall upward momentum throughout the period with recovery and growth post-2020.
- Earnings Before Interest and Tax (EBIT)
- EBIT exhibited growth from $1,957 million in 2018 to $3,247 million in 2022. There was a decline during 2020 to $1,808 million, indicating the year as an anomaly possibly influenced by external factors. However, EBIT rebounded in 2021 and grew further in 2022, maintaining an upward trajectory over the full timeframe.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA values showed consistent expansion from $3,628 million in 2018 to $5,464 million in 2022. Despite a moderate decline in 2020 to $3,796 million, the trend after this year was markedly positive, highlighting improving operating performance before accounting for non-cash expenses, interest, and taxes.
Enterprise Value to EBITDA Ratio, Current
United Rentals Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 38,486) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 5,464) |
| Valuation Ratio | |
| EV/EBITDA | 7.04 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 14.21 |
| Eaton Corp. plc | 27.79 |
| GE Aerospace | 28.85 |
| Honeywell International Inc. | 18.10 |
| Lockheed Martin Corp. | 14.49 |
| RTX Corp. | 19.14 |
| EV/EBITDA, Sector | |
| Capital Goods | 28.21 |
| EV/EBITDA, Industry | |
| Industrials | 22.47 |
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
United Rentals 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 millions) | ||||||
| Enterprise value (EV)1 | 38,486) | 31,830) | 26,539) | 22,700) | 20,938) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 5,464) | 4,253) | 3,796) | 4,200) | 3,628) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 7.04 | 7.48 | 6.99 | 5.40 | 5.77 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 13.86 | 12.43 | 19.87 | — | — | |
| Eaton Corp. plc | 19.18 | 17.06 | 22.11 | — | — | |
| GE Aerospace | 14.82 | 95.57 | 9.35 | — | — | |
| Honeywell International Inc. | 18.01 | 15.57 | 20.21 | — | — | |
| Lockheed Martin Corp. | 14.98 | 11.97 | 9.97 | — | — | |
| RTX Corp. | 14.92 | 15.48 | 41.71 | — | — | |
| EV/EBITDA, Sector | ||||||
| Capital Goods | 19.01 | 19.87 | 25.02 | — | — | |
| EV/EBITDA, Industry | ||||||
| Industrials | 16.44 | 16.30 | 30.80 | — | — | |
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
= 38,486 ÷ 5,464 = 7.04
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated a consistent upward trend over the five-year period. Starting at 20,938 million US dollars at the end of 2018, it increased steadily each year, reaching 38,486 million US dollars by the end of 2022. This represents an overall growth of approximately 84% over the period, indicating a significant expansion in the company's market valuation or capital base.
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- EBITDA exhibited growth with some fluctuations. It started at 3,628 million US dollars in 2018 and increased to 4,200 million in 2019. There was a decline in 2020 to 3,796 million, suggesting a possible impact from external or operational challenges in that year. However, EBITDA recovered in subsequent years, reaching 5,464 million in 2022, which is the highest in the period analyzed and represents a compound upward momentum post-2020 downturn.
- EV/EBITDA Ratio
- The EV/EBITDA ratio showed variability throughout the period. Beginning at 5.77 in 2018, it decreased slightly to 5.4 in 2019. In 2020, the ratio increased significantly to 6.99, reflecting the drop in EBITDA relative to enterprise value that year. The ratio peaked in 2021 at 7.48, before decreasing marginally to 7.04 in 2022. Despite fluctuations, the ratio trend suggests a higher valuation multiple relative to EBITDA over time, which could imply increased market expectations or changes in the company's risk profile or profitability outlook.
- Summary
- Overall, the data indicates substantial growth in enterprise value and EBITDA over the five years, with a notable dip in EBITDA in 2020 likely attributable to adverse conditions during that year. The EV/EBITDA ratio’s rise after 2019 reflects market adjustments to earnings volatility and possibly an increased valuation premium. The recovery in EBITDA combined with the elevated EV/EBITDA multiples suggests improving operational performance alongside optimistic market valuation in the most recent years.