EBITDA
Earnings before interest, taxes, depreciation, and amortization — an operating-profitability measure that strips out financing and accounting choices to make companies more comparable.
What it means
EBITDA — earnings before interest, taxes, depreciation, and amortization — adds those four items back to a company's net income, arriving at a rough measure of operating cash-generating power before the effects of how a company is financed (interest), where it's taxed, and how it accounts for its physical and intangible assets over time (depreciation and amortization). The idea is to strip out things that vary company to company for reasons that have nothing to do with how well the underlying business is actually performing — two companies with identical operations but different debt loads will report very different net income, but much closer EBITDA. It's a widely used measure specifically because it makes companies with different capital structures, tax situations, and accounting policies easier to compare to each other.
How MarketWall calculates it
MarketWall reports EBITDA directly from each stock's weekly Yahoo Finance fundamentals sync. See the Data Sources & Methodology page for the full sync schedule.
How it's typically used
EBITDA is most useful as a building block for other ratios (EV/EBITDA being the most common) rather than as a number to read entirely on its own — a raw EBITDA figure mostly just reflects company size, the same limitation raw EPS has. It's also a genuinely contested metric: Warren Buffett has famously criticized it for making leveraged, capital-intensive businesses look healthier than they are, since it adds back real costs (interest on real debt, depreciation on equipment that genuinely wears out and needs replacing) as if they don't matter. That criticism is worth taking seriously for capital-intensive industries — a company with heavy equipment or infrastructure investments has depreciation that isn't just an accounting artifact, it reflects real spending that recurs, so stripping it out can flatter the business more than it should. EBITDA tends to be most useful for comparing companies within the same capital-intensive industry (where everyone's D&A and interest structure work similarly) and least useful as a stand-alone measure of "how healthy is this business" across very different kinds of companies. Growth-stage, asset-light software companies are a common case where EBITDA and free cash flow tell fairly similar stories; capital-intensive industrials, telecoms, and real estate are where the gap between EBITDA and actual cash left over after necessary reinvestment can be largest.
Live example right now
Nothing is currently matching this exact signal — MarketWall's scoring is live and this list will fill in as soon as a symbol qualifies again.
FAQ
Is EBITDA the same as cash flow?
No — it's often used as a rough proxy, but EBITDA doesn't subtract capital expenditures (money spent on equipment, property, etc. to keep the business running), which Free Cash Flow does. For capital-intensive companies the gap between the two can be large.
Why is EBITDA controversial?
Critics (most famously Warren Buffett) argue it adds back real, recurring costs — interest on real debt, depreciation on equipment that genuinely wears out — as if they don't matter, which can make heavily indebted or capital-intensive businesses look healthier than they are.
What's EBITDA mainly used for?
Mostly as the denominator in the EV/EBITDA valuation ratio, and for comparing operating profitability between companies with different debt levels, tax situations, or depreciation policies.
Can EBITDA be negative?
Yes — a company can be unprofitable enough that even before interest, taxes, and D&A its earnings are negative. That's a more serious red flag than a low P/E or negative net income alone, since it means the core operations aren't generating positive earnings even before those adjustments.
See more signals in the interactive walkthrough, read the full Data Sources & Methodology page, or explore it live on a real chart — AAPL or BTC.