Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
United States Steel Corp., 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).
The financial performance between 2018 and 2022 is characterized by extreme volatility, featuring a deep operational contraction followed by a rapid and substantial recovery. The trajectory of operational profitability exhibits a U-shaped pattern, reaching its lowest point in 2020 before ascending to a peak in 2021.
- Operational Decline and Trough (2018–2020)
- A significant downward trend is observed starting in 2019, where EBITDA fell from 1,501 million US$ to 306 million US$. This decline accelerated in 2020, resulting in a negative EBITDA of 384 million US$, indicating that operational earnings were insufficient to cover depreciation and amortization expenses during this period.
- Rapid Recovery and Peak Performance (2021)
- A sharp reversal occurred in 2021, with EBITDA surging to 5,448 million US$. This represents a substantial increase from the previous year's deficit and exceeds the 2018 baseline by approximately 263%, marking the highest level of operational profitability in the analyzed five-year span.
- Moderate Correction (2022)
- In 2022, EBITDA decreased to 4,209 million US$. While this reflects a decline from the 2021 peak, the figure remains significantly higher than the levels recorded between 2018 and 2020, suggesting a higher baseline of operational earnings compared to the start of the period.
- Correlation Between Operational and Net Results
- A strong correlation exists between EBITDA and Net earnings. Both metrics transitioned from positive values in 2018 to losses in 2019 and 2020, followed by a synchronous peak in 2021. The alignment of these trends indicates that the volatility in bottom-line profitability is primarily driven by fluctuations in core operational performance.
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Enterprise Value to EBITDA Ratio, Current
United States Steel Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 6,067) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 4,209) |
| Valuation Ratio | |
| EV/EBITDA | 1.44 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Freeport-McMoRan Inc. | 12.98 |
| EV/EBITDA, Industry | |
| Materials | 18.71 |
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 States Steel Corp., 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 | 7,375) | 7,641) | 7,326) | 4,388) | 5,352) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 4,209) | 5,448) | (384) | 306) | 1,501) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 1.75 | 1.40 | — | 14.34 | 3.57 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Freeport-McMoRan Inc. | 7.74 | 7.20 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Materials | 14.17 | 13.46 | — | — | — | |
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
= 7,375 ÷ 4,209 = 1.75
4 Click competitor name to see calculations.
The financial performance of United States Steel Corp. between 2018 and 2022 is characterized by significant volatility in operational earnings, which has led to drastic fluctuations in the Enterprise Value to EBITDA (EV/EBITDA) ratio.
- Enterprise Value (EV) Trends
- Enterprise value experienced a moderate decline from US$ 5,352 million in 2018 to US$ 4,388 million in 2019. However, a substantial increase occurred in 2020, with the value rising to US$ 7,326 million and peaking at US$ 7,641 million in 2021, before stabilizing at US$ 7,375 million by the end of 2022.
- EBITDA Volatility
- Earnings before interest, tax, depreciation and amortization showed extreme variance over the five-year period. After a strong 2018 performance of US$ 1,501 million, earnings plummeted to US$ 306 million in 2019 and became negative in 2020, reaching US$ -384 million. A sharp recovery followed in 2021, with EBITDA surging to a peak of US$ 5,448 million, followed by a moderation to US$ 4,209 million in 2022.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio reflects the inverse relationship between enterprise value and earnings volatility. In 2019, the ratio spiked to 14.34 as EBITDA decreased sharply while EV remained relatively stable. Due to negative EBITDA in 2020, the ratio was not applicable for that period. Following the earnings surge in 2021, the ratio compressed significantly to 1.40, and remained low at 1.75 in 2022, suggesting a valuation that is low relative to the company's current operational cash flow generation.
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