Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Verizon Communications Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net Income attributable to Verizon
- The net income experienced an increase from 17,801 million USD in 2020 to a peak of 22,065 million USD in 2021. Subsequently, it slightly decreased to 21,256 million USD in 2022 and saw a more pronounced decline to 11,614 million USD in 2023. However, in 2024, the net income rebounded to 17,506 million USD, though it remained below the 2021 and 2022 levels.
- Earnings Before Tax (EBT)
- EBT showed a similar trend to net income, rising from 23,967 million USD in 2020 to a peak of 29,420 million USD in 2021. It then decreased to 28,271 million USD in 2022, followed by a sharper drop to 16,987 million USD in 2023. In 2024, EBT partially recovered to 22,979 million USD, remaining lower than the peak years but above the 2020 figure.
- Earnings Before Interest and Tax (EBIT)
- EBIT increased from 28,214 million USD in 2020 to a high of 32,905 million USD in 2021 and maintained a close level at 31,884 million USD in 2022. The figure then declined significantly to 22,511 million USD in 2023 before rising again to 29,628 million USD in 2024. Despite fluctuations, the overall level in 2024 is somewhat close to the pre-decline years, indicating partial recovery.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA showed growth from 44,934 million USD in 2020 to 49,111 million USD in 2021, remaining stable around 48,983 million USD in 2022. A notable decrease occurred in 2023, with EBITDA dropping to 40,135 million USD. By 2024, EBITDA improved to 47,520 million USD but did not fully regain its peak levels from 2021 and 2022.
- Summary of Trends
- The financial data across all earnings measures reveal a pattern of growth from 2020 through 2021, followed by declines in 2022 and particularly in 2023. The declines in 2023 are substantial across net income, EBT, EBIT, and EBITDA, indicating a challenging operating environment or other adverse factors in that year. The figures for 2024 show a clear trend of recovery, although none of the earnings metrics fully return to their 2021 peaks. The partial rebound suggests improved business conditions or successful management actions aimed at restoring profitability. Overall, while volatility is evident, the company demonstrates resilience with signs of financial stabilization by the end of the period analyzed.
Enterprise Value to EBITDA Ratio, Current
Verizon Communications Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 319,548) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 47,520) |
| Valuation Ratio | |
| EV/EBITDA | 6.72 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| AT&T Inc. | 7.63 |
| T-Mobile US Inc. | 11.03 |
| EV/EBITDA, Sector | |
| Telecommunication Services | 8.14 |
| EV/EBITDA, Industry | |
| Communication Services | 14.18 |
Based on: 10-K (reporting date: 2024-12-31).
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
Verizon Communications Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 311,777) | 316,972) | 317,390) | 373,185) | 342,126) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 47,520) | 40,135) | 48,983) | 49,111) | 44,934) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 6.56 | 7.90 | 6.48 | 7.60 | 7.61 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| AT&T Inc. | 7.18 | 5.84 | 13.24 | 5.09 | 8.75 | |
| T-Mobile US Inc. | 10.99 | 9.74 | 12.39 | 9.78 | 10.37 | |
| EV/EBITDA, Sector | ||||||
| Telecommunication Services | 7.90 | 7.51 | 9.38 | 6.75 | 8.58 | |
| EV/EBITDA, Industry | ||||||
| Communication Services | 13.87 | 12.96 | 11.75 | 11.59 | 14.52 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 311,777 ÷ 47,520 = 6.56
4 Click competitor name to see calculations.
This analysis addresses the financial trends observed over the five-year period ending December 31, 2024. The main focus is on enterprise value (EV), earnings before interest, tax, depreciation, and amortization (EBITDA), and the EV to EBITDA ratio.
- Enterprise Value (EV)
- There is a noticeable fluctuation in enterprise value over the period. Starting at US$342,126 million in 2020, EV increased to a peak of US$373,185 million in 2021. This was followed by a decrease in the subsequent years, dropping to US$317,390 million in 2022, then remaining relatively stable around US$317,000 million in 2023, and slightly declining further to US$311,777 million in 2024. The trend indicates a reduction in overall market valuation or capital structure adjustments after 2021.
- EBITDA
- The EBITDA shows variability with an initial increase from US$44,934 million in 2020 to a high of US$49,111 million in 2021 and 2022. However, in 2023, EBITDA declined sharply to US$40,135 million, representing a significant drop of approximately 18% compared to the previous year. In 2024, EBITDA rebounded to US$47,520 million, suggesting a recovery in operating earnings after the downturn.
- EV/EBITDA Ratio
- The EV/EBITDA ratio fluctuated between 6.48 and 7.9 over the period. It started at 7.61 in 2020 and remained relatively stable at 7.6 in 2021. In 2022, the ratio decreased to its lowest point at 6.48, mainly due to a reduction in EV combined with stable EBITDA. In 2023, the ratio increased sharply to 7.9, driven by the sharp EBITDA drop while EV remained stable. For 2024, the ratio decreased again to 6.56, reflecting the EBITDA recovery alongside a slight decrease in EV.
- Insights
- The substantial decrease in enterprise value after 2021 suggests changes in investor sentiment or capital structure, possibly due to market conditions or company-specific factors. The EBITDA volatility, especially the drop in 2023 followed by a recovery in 2024, indicates temporary operational challenges that were partially resolved by the end of the period. The EV/EBITDA ratio's movements correspond with these trends, illustrating how valuation metrics were sensitive to changes in operating performance and enterprise valuation.