Switch to:
Discover Financial Services (NYSE:DFS)
EV/EBITDA
9.77 (As of Today)

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Discover Financial Services's enterprise value is $41,631 Mil. Discover Financial Services's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Mar. 2014 was $4,242 Mil. Therefore, Discover Financial Services's EV/EBITDA ratio for today is 9.77.

EV/EBITDA (Enterprise value/EBITDA) is a valuation multiple used in finance and investment to measure the value of a company. This important multiple is often used in conjunction with, or as an alternative to, the P/E Ratio to determine the fair market value of a company.

As of today, Discover Financial Services's stock price is $63.26. Discover Financial Services's earnings per share for the trailing twelve months (TTM) ended in Mar. 2014 was $4.95. Therefore, Discover Financial Services's P/E Ratio for today is 12.80.

The "classic" EV/EBITDA ratio is much better in capturing debt and net cash than the P/E Ratio.


Definition

Discover Financial Services's EV/EBITDA for today is calculated as:

EV/EBITDA=Enterprise Value (Today)/Earnings Before Depreciation and Amortization (TTM)
=41631.340/4242
=9.81

Discover Financial Services's current Enterprise Value is $41,631 Mil.
Discover Financial Services's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Mar. 2014 was 1076 (Jun. 2013 ) + 1030 (Sep. 2013 ) + 1024 (Dec. 2013 ) + 1112 (Mar. 2014 ) = $4,242 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

EV/EBITDA (Enterprise value/EBITDA) is a valuation multiple used in finance and investment to measure the value of a company. This important multiple is often used in conjunction with, or as an alternative to, the P/E Ratio to determine the fair market value of a company.

Discover Financial Services's P/E Ratio for today is calculated as:

P/E Ratio=Share Price (Today)/Earnings Per Share (TTM)
=63.26/4.948
=12.78

Discover Financial Services's share price for today is $63.26.
Discover Financial Services's Earnings Per Share for the trailing twelve months (TTM) ended in Mar. 2014 was 1.2 (Jun. 2013 ) + 1.2 (Sep. 2013 ) + 1.238 (Dec. 2013 ) + 1.31 (Mar. 2014 ) = $4.95.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Study has found that the companies with the lowest EV/EBITDA outperforms companies measured as cheap by other ratios such as P/E Ratio.

Please read Which price ratio outperforms the enterprise multiple?


Related Terms

Enterprise Value, Earnings Before Depreciation and Amortization, P/E Ratio


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Discover Financial Services Annual Data

Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Dec12Dec13
ev2ebitda 0.000.005.04-1.60-1.0315.407.489.297.339.65

Discover Financial Services Quarterly Data

Feb12May12Aug12Nov12Dec12Mar13Jun13Sep13Dec13Mar14
ev2ebitda 6.977.748.329.297.338.328.719.269.659.32
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide