Elanco Animal Health (ELAN) AI Stock Analysis

• Market Cap: $8.92B
• Dividend Yield: N/A
• Average Volume (3M): 5.59M
• Price to Earnings (P/E): 20.6
• Beta (1Y): 1.43
• Revenue Growth: -0.18%
• EPS Growth: N/A
• Country: US
• Employees: 9,000
• Sector: Healthcare
• Sector Strength: 51
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.26
• Shares Outstanding: 496,813,700
• 10 Day Avg. Volume: 7,701,492
• 30 Day Avg. Volume: 5,590,805
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 2.41
• Enterprise Value/Gross Profit: 5.26
• Enterprise Value/Ebitda: 7.27
• 1Y Price Target: $18.17
• Price Target Upside: 2.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 72 Outperform
• Price Target: $19.50 ▲(10.17% Upside)

Elanco Animal Health's overall stock score reflects a positive financial recovery trajectory, strong technical momentum, and encouraging earnings call outcomes. The strategic CFO appointment further supports growth initiatives. However, caution is advised due to potential short-term technical pullbacks and challenges like tariffs and increased expenses.

Positive Factors

Financial Performance

Elanco reported upside 2Q results, with sales, EBITDA, and EPS all ahead of expectations.

Growth Prospects

Elanco Animal Health raised its 2025 organic growth guidance, showing confidence in future performance.

Product Innovation

The 2025 innovation sales target was raised once again by $60MM, further underscoring the momentum of the company's recent product launches, highlighted by robust Credelio Quattro uptake in just two quarters.

Negative Factors

Market Competition

The implied 4Q guidance appears conservative to account for potential changes to the competitive landscape, at this juncture, but does imply a deceleration in revenue growth.

Market Environment

The backdrop could become more challenging due to potential new entrants in the market.

Elanco Animal Health Business Overview & Revenue Model

Company Description

Elanco Animal Health (ELAN) is a global leader in animal health, dedicated to advancing the health and well-being of pets and livestock. The company operates in two primary sectors: companion animals and food animals, providing a range of innovative products, including vaccines, parasiticides, antibiotics, and nutritional supplements. Elanco's mission is to enhance animal health through science-based solutions, ensuring better lives for animals and the people who care for them.

How the Company Makes Money

Elanco Animal Health generates revenue through the sale of a diverse portfolio of animal health products and services aimed at both companion animals and livestock. The company's key revenue streams include the sale of pharmaceuticals, vaccines, and nutritional products. Elanco also benefits from long-term partnerships with veterinarians, animal producers, and distributors, which help to expand its market reach. Additionally, the company invests in research and development to bring new products to market, which can lead to increased sales and market share. Factors contributing to its earnings include the growing global demand for animal protein, increased pet ownership, and an emphasis on animal welfare, all of which drive the need for effective animal health solutions.

Elanco Animal Health Financial Statement Overview

Summary

Elanco Animal Health demonstrates resilience in profitability with improved net income margins, despite a slight dip in revenue. The balance sheet shows moderate leverage and improved return on equity, though further reduction in liabilities could enhance financial stability. Cash flow metrics are strong, indicating efficient cash management. Overall, the company is on a positive financial trajectory but needs to address operating efficiency and leverage further.

Income Statement

Elanco Animal Health has shown stable revenue with a modest decline from $4.44 billion to $4.43 billion in the TTM. The gross profit margin is strong at 46.0%, and the net profit margin improved significantly to 8.4% in TTM, indicating enhanced profitability. However, EBIT and EBITDA margins have seen a decline, suggesting potential challenges in managing operating expenses effectively.

Balance Sheet

The company's debt-to-equity ratio is 0.69, reflecting a moderate leverage level. Return on equity significantly improved to 5.9%, signaling better utilization of shareholder funds. The equity ratio stands at 49.1%, indicating a balanced capital structure but with room for improvement in reducing liabilities.

Cash Flow

The free cash flow growth rate shows a recovery from previous years, now at 341 million in TTM. The operating cash flow to net income ratio at 1.43 indicates strong cash generation relative to net income. The free cash flow to net income ratio is 0.91, showing effective cash management. Overall, the cash flow is robust and improving.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.48B	4.44B	4.42B	4.42B	4.76B	3.27B
Gross Profit	2.06B	1.91B	1.94B	2.50B	2.63B	1.61B
EBITDA	1.49B	1.39B	-224.00M	866.00M	409.00M	-76.80M
Net Income	434.00M	338.00M	-1.23B	-74.00M	-472.00M	-560.10M
Balance Sheet
Total Assets	13.74B	12.61B	14.36B	15.49B	16.48B	17.69B
Cash, Cash Equivalents and Short-Term Investments	539.00M	468.00M	352.00M	345.00M	638.00M	494.70M
Total Debt	4.21B	4.32B	5.77B	5.84B	6.32B	6.13B
Total Liabilities	6.97B	6.52B	8.14B	8.20B	8.95B	9.22B
Stockholders Equity	6.78B	6.10B	6.22B	7.29B	7.54B	8.48B
Cash Flow
Free Cash Flow	355.00M	394.00M	117.00M	268.00M	286.00M	-351.90M
Operating Cash Flow	572.00M	541.00M	271.00M	452.00M	483.00M	-41.00M
Investing Cash Flow	1.04B	1.16B	-169.00M	-179.00M	-530.00M	-4.78B
Financing Cash Flow	-1.48B	-1.49B	-83.00M	-549.00M	210.00M	4.95B

Elanco Animal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELAN, the sentiment is Positive. The current price of 17.7 is above the 20-day moving average (MA) of 15.57, above the 50-day MA of 14.80, and above the 200-day MA of 12.43, indicating a bullish trend. The MACD of 0.94 indicates Negative momentum. The RSI at 73.17 is Negative, neither overbought nor oversold. The STOCH value of 96.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ELAN.

Elanco Animal Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTS	76 Outperform	$68.30B	26.52	52.54%	1.27%	5.27%	13.72%
RDY	75 Outperform	$12.01B	17.78	17.48%	0.64%	13.13%	-0.47%
ELAN	72 Outperform	$8.92B	20.58	6.83%	―	-0.18%	―
PAHC	68 Neutral	$1.24B	39.25	11.86%	1.57%	19.12%	141.45%
Sector *	60 Neutral	HK$19.37B	4.62	-4.00%	3.28%	11.14%	-17.52%
TEVA	58 Neutral	$20.07B	―	-2.31%	―	2.43%	64.37%
VTRS	57 Neutral	$12.37B	―	-19.77%	4.52%	-7.47%	-438.39%

Elanco Animal Health Corporate Events

Elanco Animal Health Amends Receivables Loan Agreement

On June 25, 2025, Elanco Animal Health Incorporated, along with Elanco SPEAR LLC and Elanco US Inc., amended its Receivables Loan Agreement with Rabobank, extending the term of the agreement to June 26, 2028. This amendment impacts the company’s accounts receivable securitization facility, potentially affecting its financial obligations and operational flexibility.

Elanco Appoints New CFO to Drive Growth

On May 28, 2025, Elanco Animal Health announced the appointment of Robert VanHimbergen as Executive Vice President and Chief Financial Officer, effective July 7, 2025. VanHimbergen, who previously held leadership roles at Hillenbrand, Inc. and Johnson Controls, will succeed Todd Young, who will remain as an advisor until August 31, 2025, to ensure a smooth transition. This strategic appointment is part of Elanco’s commitment to long-term value creation, with VanHimbergen’s extensive experience expected to support the company’s growth and innovation initiatives. The transition marks a proactive change as Elanco continues to focus on accelerating growth, expanding margins, and enhancing shareholder value.

Elanco Shareholders Approve Board and Compensation Plans

On May 16, 2025, Elanco Animal Health held its annual meeting of shareholders where all board-nominated directors were elected for a one-year term. Shareholders ratified Ernst & Young LLP as the independent accounting firm for 2025, approved executive compensation, and decided on an annual advisory vote on executive compensation until 2031, aligning with the board’s recommendation.