EV/EBIT History Chart

How to Read EV/EBIT History

EV/EBIT compares a company's enterprise value — market cap plus net debt — to its trailing annual operating income (EBIT). Unlike EV/EBITDA, it includes depreciation and amortization, making it a stricter test for capital-intensive businesses where D&A is a real economic cost, not just an accounting entry.

A stock's current EV/EBIT tells you today's implied multiple. Its 10-year history tells you whether the market is paying a premium or a discount relative to what it has historically demanded for the same business. Bars below 10× are highlighted green (cheap); 10–20× blue (fair); above 20× red (expensive). The orange dashed line shows the sector median as a market-context anchor.

Two caveats: EV/EBIT is not meaningful for financial companies (banks, insurers) because operating income is not a clean proxy for economic earnings. Companies with negative EBIT — early-stage businesses or cyclical companies at a trough — will also show distorted or missing readings. Always pair historical context with a full valuation model via the EV/EBIT Calculator.

The threshold of 10× is a rough boundary for "cheap" in most non-financial sectors, while 20× tends to reflect growth or scarcity premiums. Capital-intensive sectors like energy and materials routinely trade at 8–14× at cycle peaks; asset-light technology and software names can sustain 25–40× on durable moats. Context from the sector median line matters as much as the absolute level.