Hi Tigers! The EV/EBIT ratio is a financial metric used to assess the valuation of a company in relation to its earnings before interest and taxes (EBIT).
Here's a breakdown:
EV (Enterprise Value): This is the total value of a company, calculated as the market capitalization (the total value of all its shares) plus debt, minus cash and cash equivalents. It represents the cost to acquire the entire company, including debt obligations and excluding excess cash.
EBIT (Earnings Before Interest and Taxes): This is a measure of a company's profitability that excludes interest and taxes, providing an idea of the company's ability to generate profit from operations alone.
Interpretation:
Low EV/EBIT: A lower ratio could indicate that the company is undervalued relative to its operating earnings, which may suggest a buying opportunity.
High EV/EBIT: A higher ratio could suggest that the company is overvalued or that investors expect significant future growth.
It is commonly used by investors to compare companies within the same industry or sector, as it helps determine whether a company is valued attractively based on its operational earnings.
The following is a compilation of 7 companies, based on publicly available information. This is for discussion purposes only.
1. $lululemon athletica(LULU)$
Core Business & Latest Business Developments: Lululemon is a premium athletic-apparel company focused on yoga, running and training gear. Recent initiatives include launching the “Align No Line” collection, accelerating China expansion (21 % Q1 growth expected to reach 25–30 % FY-25), and opening its largest flagship in Shanghai to capture rising Asian demand .
Recent Financial Highlights: Q1 2025 revenue $2.37 billion, EPS $2.60 (beat guidance $2.53–$2.58); FY 2025 EPS guidance lowered to $14.58–$14.78 on tariff and markdown headwinds .
Analyst Target Price Expectations: 24-analyst average $312.85 (range $224–$405), down 7.4 % from prior $338.57; latest cuts include BofA to $370 and Stifel to $324 amid tariff concerns .
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2. $FISERV INC(FI)$
Core Business & Latest Business Developments: Fiserv is a global fintech leader providing payment processing (Clover) and banking-tech solutions. In July 2025 it closed the Payfare acquisition to bolster embedded-finance capabilities for gig workers .
Recent Financial Highlights: Q2 2025 adjusted EPS $2.47 (beat $2.43 est.), revenue $5.52 billion (beat $5.2 billion est.); FY-25 organic growth trimmed to the low end of 10 % .
Analyst Target Price Expectations: Post-earnings downward revisions dominate: TD Cowen cut to $188, RBC to $178, Stephens to $180, while Morgan Stanley holds $266; 42-analyst consensus remains “Buy” with average $210 (range $178–$270) .
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3. $LVMH-Moet Hennessy Louis Vuitton(LVMHF)$
Core Business & Latest Business Developments: Global luxury conglomerate spanning fashion & leather goods, wines & spirits, perfumes & cosmetics, watches & jewelry and selective retail. H1-2025 highlights include record €4 billion operating free cash flow, continued renovation of Tiffany & Co. flagships and Sephora’s global expansion, plus resilient local demand in Europe and the U.S. despite softer China traffic .
Recent Financial Highlights: (H1-2025) Revenue €39.8 billion (-4 % YoY, -3 % organic); net profit €5.7 billion; EPS €1.62; operating margin 22.6 % .
Analyst Target Price Expectations: Street median €470 (range €450–€500), implying ~8 % upside from the last close, with most houses reiterating “Buy” on brand strength and cash-flow resilience .
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4. $Adobe(ADBE)$
Core Business & Latest Business Developments: Adobe is embedding next-gen Firefly AI across Creative and Experience Clouds, launching generative-video tools and enterprise marketing copilots to broaden its AI monetization funnel .
Recent Financial Highlights: (FY 2024 / Q2 2025 guidance) Revenue $21.5 billion (+10.8 % YoY), net income $5.56 billion, diluted EPS $15.63; gross margin 89 %, operating margin 31 % .
Analyst Target Price Expectations: Consensus $500 (range $425–$600), reflecting ~33 % upside and sustained “Buy” calls on Creative Cloud seat growth and pricing power .
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5. $Evolution AB(EVVTY)$
Core Business & Latest Business Developments: Swedish B2B provider of live-casino and RNG gaming platforms to global operators; continues to roll out new live-dealer studios in North America and Asia to meet online-gaming demand.
Recent Financial Highlights: H1 2025 revenue €1.05 B (+15 % YoY), net income €0.46 B, EPS €2.15.
Analyst Target Price Expectations: Consensus 12-month target SEK 1,180 (range SEK 1,050–1,300), implying ~8 % upside.
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6. $UnitedHealth(UNH)$
Core Business & Latest Business Developments: Dominant U.S. health-insurer (Optum + UnitedHealthcare); 2025 growth drivers include aging-population tailwinds, AI-driven cost management, and expansion of value-based-care programs.
Recent Financial Highlights: Revenue $109.5 B in Q1 2025 (+9.8 % YoY). Adjusted EPS: $7.20 (miss), FY-25 guidance cut to $26.00–$26.50 (vs. prior $29.50–$30.00) .
Analyst Target Price Expectations: Consensus $500 (range $450–$550), 20 of 25 analysts rate “Buy”.
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7. $Nike(NKE)$
Core Business & Latest Business Developments: Nike is the world’s largest athletic-footwear, apparel and equipment company. After a tough FY-25, new CEO Elliott Hill has launched “Win Now / Sport Offense” — doubling marketing spend, accelerating DTC (direct-to-consumer) digital channels, and shifting supply chains to offset a US$1 billion tariff headwind from the US-Vietnam trade deal .
Recent Financial Highlights: FY 2025 (ended May 31, 2025): revenue $46.3 billion (-10 % reported, -9 % currency-neutral); net income $3.2 billion (-44 % YoY); diluted EPS $2.16.
Analyst Target Price Expectations: Consensus 12-month target $95 (range $64–$110) versus the last close ~$79, implying ~20 % upside.
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