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EV / EBITDA for Alphabet Inc Class A

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GOOGL: Alphabet Inc Class A

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Clou...

159.32 USD
Price
USD
Fair Value
Upside
140.53 - 207.05
52-week range

Analysis

Fiscal Years
Trailing Twelve Months
Fiscal Halfs
Fiscal Quarters
Daily
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The following section summarizes insights on Alphabet Inc Class A's EV / EBITDA:

Dec 2016Dec 2018Dec 2020Dec 2022Dec 202410.0x15.0x20.0x25.0x

Performance Summary
  • Alphabet's latest twelve months ev / ebitda is 14.1x
  • Alphabet's ev / ebitda for fiscal years ending December 2020 to 2024 averaged 17.3x.
  • Alphabet's operated at median ev / ebitda of 18.3x from fiscal years ending December 2020 to 2024.
  • Looking back at the last 5 years, Alphabet's ev / ebitda peaked in December 2020 at 22.1x.
  • Alphabet's ev / ebitda hit its 5-year low in December 2022 of 11.0x.
  • Alphabet's ev / ebitda decreased in 2021 (20.9x, -5.6%), 2022 (11.0x, -47.6%), and 2024 (14.1x, -23.4%) and increased in 2020 (22.1x, +27.7%) and 2023 (18.3x, +67.3%).

How does Alphabet A's EV / EBITDA benchmark against competitors?

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We've identified the following companies as similar to Alphabet Inc Class A because they operate in a related industry or sector. We also considered size, growth, and various financial metrics to narrow down the list to the ones listed below.

Metric Usage: EV / EBITDA

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ev_to_ebitda_ltm
Slug
number
Datatype
text
Format
current
Default Period
FY, LTM
Periods Supported
Free
Plan

To view the full list of supported financial metrics please see Complete Metrics Listing.

Similar Metrics

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Metrics similar to EV / EBITDA in the valuation category include:

  • EV / Invested Capital - Measures the dollars in Enterprise Value for each dollar of Invested Capital (Equity + Debt) over the last twelve months.
  • Market Cap / Fwd AFFO - Indicates the multiple of projected adjusted funds from operations (AFFO) that stock investors are willing to pay for one share of the firm.
  • Ben Graham Number - A calculation inspired by Benjamin Graham often who is called the "father of value investing." The Graham Number estimates a stock's fundamental value by taking into account the company's earnings per share and book value per share.
  • Price / Tangible Book Value - Compares a firm's market value of equity to its book value of tangible common equity value.
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EV / EBITDA

Measures the dollars in Enterprise Value for each dollar of EBITDA over the last twelve months.

Definition of EV / EBITDA

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LTM EBITDA Multiple is defined as:

EBITDA Multiple = Enterprise Value / LTM EBITDA

Applying this formula, Alphabet’s EV/EBITDA Ratio is calculated below:

Enterprise Value [ $1,819.6 B ]
(/) EBITDA [ $129.5 B ]
(=) EV/EBITDA Ratio [ 14.1x ]

The tables below summarizes the trend in Alphabet’s EV/EBITDA Ratio over the last five years:

Date Enterprise Value EBITDA EV/EBITDA Ratio
2020-12-31 $1,064.7 B $48.075 B 22.1
2021-12-31 $1,781 B $85.197 B 20.9
2022-12-31 $1,027.7 B $93.733 B 11.0
2023-12-31 $1,635.1 B $89.134 B 18.3
2024-12-31 $1,819.6 B $129.5 B 14.1

EBITDA Multiple, Enterprise Value / EBITDA, or EV / EBITDA measures the dollars in Enterprise Value for each dollar of EBITDA.

EBITDA is used in the denominator since it is capital structure neutral and can be used to compare companies with different levels of debt (See EBITDA for benefits). We use Enterprise Value as the numerator to consider the claims on EBITDA of both debt and equity holders.

Strong revenue and EBITDA growth are highly correlated with higher EBITDA Multiples.

Read more about enterprise value (ev) and ebitda


Click the link below to download a spreadsheet with an example EV / EBITDA calculation for Alphabet Inc Class A below:

Sector Benchmark Analysis

Sector
Industry Group
Industry
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-66.2x-16.2x33.8x115.8x50150250

The chart above depicts the distribution of ev / ebitda for companies operating in the Communication Services sector in the Developed economic region. Over 1,075 companies were considered in this analysis, and 1,036 had meaningful values. The average ev / ebitda of companies in the sector is 4.8x with a standard deviation of 16.9x.

Alphabet Inc Class A's EV / EBITDA of 14.1x ranks in the 85.0% percentile for the sector. The following table provides additional summary stats:

EV / EBITDA In The Communication Services Sector
Economic Risk RegionDeveloped
Total Constituents1,080
Included Constituents1,036
Min-66.9x
Max112.7x
Median4.9x
Mean4.8x
Standard Deviation16.9x

You can find companies with similar ev / ebitda using this stock screener.

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