Elanco Animal Health (ELAN) AI Stock Analysis

• Market Cap: $11.08B
• Dividend Yield: N/A
• Average Volume (3M): 5.56M
• Price to Earnings (P/E): 305.9
• Beta (1Y): 1.31
• Revenue Growth: 3.08%
• EPS Growth: -82.39%
• Country: US
• Employees: 9,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.19
• Shares Outstanding: 496,863,460
• 10 Day Avg. Volume: 7,618,928
• 30 Day Avg. Volume: 5,562,623
• PEG Ratio: -0.14
• Price to Book (P/B): 0.98
• Price to Sales (P/S): 1.35
• P/FCF Ratio: 15.18
• Enterprise Value/Market Cap: 1.22
• Enterprise Value/Revenue: 2.95
• Enterprise Value/Gross Profit: 6.35
• Enterprise Value/Ebitda: 15.18
• 1Y Price Target: $25.36
• Price Target Upside: 14.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 0.93
• Revenue Forecast (FY): $4.66B

• Rating: 69 Neutral
• Price Target: $23.50 ▲(5.76% Upside)

Elanco Animal Health's overall stock score reflects strong earnings call results and positive technical indicators, offset by moderate financial performance and valuation concerns. The company's strategic focus on innovation and improved leverage ratios are key strengths, while challenges in profitability and pricing growth present risks.

Positive Factors

Innovation Revenue Growth

Strong innovation revenue growth indicates successful R&D efforts and product differentiation, enhancing competitive advantage and market position.

Improved Leverage Ratio

A lower leverage ratio strengthens financial stability and flexibility, allowing for better capital management and investment in growth opportunities.

Refinancing of Term Loan B

Refinancing extends debt maturities, reducing near-term financial pressure and improving the capital structure, supporting long-term strategic initiatives.

Negative Factors

Flat Pricing Growth

Flat pricing growth can limit revenue expansion and margin improvement, potentially impacting profitability and competitive positioning over time.

Bovaer Growth Challenges

Slower adoption of Bovaer may hinder expected revenue growth and delay returns on investment in this product line, affecting long-term growth potential.

Interest Expense Increase Expected

Rising interest expenses can strain profitability and cash flow, reducing financial flexibility and potentially impacting future investment capacity.

Elanco Animal Health Business Overview & Revenue Model

Company Description

Elanco Animal Health Incorporated, an animal health company, innovates, develops, manufactures, and markets products for pets and farm animals. It offers pet health disease prevention products, such as parasiticide and vaccine products that protect pets from worms, fleas, and ticks under the Seresto, Advantage, Advantix, and Advocate brands; pet health therapeutics for pain, osteoarthritis, ear infections, cardiovascular, and dermatology indications in canines and felines under the Galliprant and Claro brands; vaccines, antibiotics, parasiticides, and other products for use in poultry and aquaculture production, as well as nutritional health products, including enzymes, probiotics, and prebiotics; and a range of vaccines, antibiotics, implants, parasiticides, and other products used in ruminant and swine production under the Rumensin and Baytril brands. The company sells its products to third-party distributors; veterinarians; and farm animal producers, including beef and dairy farmers, as well as pork, poultry, and aquaculture operations. Elanco Animal Health Incorporated was founded in 1954 and is headquartered in Greenfield, Indiana.

How the Company Makes Money

Elanco Animal Health generates revenue primarily through the sale of its animal health products, including prescription pharmaceuticals, over-the-counter medications, vaccines, and nutritional supplements. The company has a diversified revenue model that includes direct sales to veterinarians, livestock producers, and distributors. Key revenue streams come from its established portfolio of products, which address various health challenges in both companion and food animals. Additionally, Elanco benefits from strategic partnerships and collaborations with other companies and research institutions to enhance its product offerings and expand its market reach. The company's focus on innovation and developing new products, as well as its global presence, contributes significantly to its earnings.

Elanco Animal Health Financial Statement Overview

Summary

Elanco Animal Health demonstrates stable revenue growth and operational efficiency, with a solid balance sheet characterized by balanced leverage and a strong equity base. However, profitability remains a challenge, as indicated by low net profit margins and moderate cash flow ratios. Continued focus on improving profitability and cash flow generation will be crucial for future growth.

Income Statement

Elanco Animal Health shows a modest revenue growth of 2.39% in the TTM, with a stable gross profit margin of 46.37%. However, the net profit margin is quite low at 0.78%, indicating limited profitability. The EBIT and EBITDA margins are moderate at 4.77% and 19.17%, respectively, suggesting operational efficiency but room for improvement in profitability.

Balance Sheet

The company's debt-to-equity ratio of 0.60 indicates a balanced leverage position, which is a positive sign of financial stability. The return on equity is 6.74%, reflecting a reasonable return for shareholders. The equity ratio stands at 49.81%, showing a solid equity base relative to total assets.

Cash Flow

Elanco's free cash flow growth is strong at 1.97%, and the free cash flow to net income ratio is 0.58, indicating good cash generation relative to profits. However, the operating cash flow to net income ratio of 0.43 suggests that cash flow from operations could be improved to better support earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.59B	4.44B	4.42B	4.41B	4.76B	3.27B
Gross Profit	2.13B	1.91B	1.94B	1.97B	2.08B	1.25B
EBITDA	891.00M	1.49B	-224.00M	866.00M	409.00M	900.00K
Net Income	36.00M	338.00M	-1.23B	-78.00M	-483.00M	-560.10M
Balance Sheet
Total Assets	13.55B	12.61B	14.36B	15.49B	16.48B	17.69B
Cash, Cash Equivalents and Short-Term Investments	505.00M	468.00M	352.00M	345.00M	638.00M	495.00M
Total Debt	4.02B	4.32B	5.77B	5.84B	6.32B	6.13B
Total Liabilities	6.80B	6.52B	8.14B	8.20B	8.97B	9.22B
Stockholders Equity	6.75B	6.10B	6.22B	7.29B	7.51B	8.48B
Cash Flow
Free Cash Flow	362.00M	394.00M	117.00M	268.00M	286.00M	-351.90M
Operating Cash Flow	629.00M	541.00M	271.00M	452.00M	483.00M	-41.00M
Investing Cash Flow	-305.00M	1.16B	-169.00M	-179.00M	-530.00M	-4.78B
Financing Cash Flow	-289.00M	-1.49B	-83.00M	-549.00M	210.00M	4.95B

Elanco Animal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 22.22 is above the 20-day moving average (MA) of 22.12, above the 50-day MA of 21.93, and above the 200-day MA of 16.17, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 53.32 is Neutral, neither overbought nor oversold. The STOCH value of 79.28 is Neutral, 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	74 Outperform	$54.55B	20.82	49.87%	1.69%	2.68%	11.51%
RDY	73 Outperform	$11.96B	17.42	17.72%	0.64%	10.63%	6.35%
ELAN	69 Neutral	$11.08B	305.90	0.54%	―	3.08%	-82.39%
PAHC	64 Neutral	$1.54B	22.48	23.79%	1.27%	33.71%	289.48%
TEVA	63 Neutral	$35.56B	51.51	10.77%	―	-0.25%	―
VTRS	60 Neutral	$13.83B	―	-21.09%	3.99%	-6.40%	-320.23%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Elanco Animal Health Corporate Events

Elanco Animal Health Amends Credit Agreement for Refinancing

On October 31, 2025, Elanco Animal Health Incorporated announced an amendment to its Credit Agreement, initially dated August 1, 2020. This amendment involves refinancing a portion of its outstanding term loans by securing new U.S. dollar and euro-denominated term loans, as well as farm credit term loans, with maturity dates extending to 2032 and 2029. The proceeds from these refinancing facilities, along with cash on hand, were used to refinance existing borrowings and cover related fees and expenses, potentially impacting the company’s financial structure and operational flexibility.