Elanco Animal Health (ELAN) AI Stock Analysis

• Market Cap: $7.04B
• Dividend Yield: N/A
• Average Volume (3M): 6.58M
• Price to Earnings (P/E): 18.4
• Beta (1Y): 1.42
• Revenue Growth: 1.42%
• EPS Growth: N/A
• Country: US
• Employees: 9,000
• Sector: Healthcare
• Sector Strength: 58
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.37
• Shares Outstanding: 496,646,500
• 10 Day Avg. Volume: 5,617,506
• 30 Day Avg. Volume: 6,575,969
• PEG Ratio: 0.95
• Price to Book (P/B): 0.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.27
• Enterprise Value/Market Cap: 1.63
• Enterprise Value/Revenue: 0.64
• Enterprise Value/Gross Profit: 5.63
• Enterprise Value/Ebitda: 6.97
• 1Y Price Target: $13.42
• Price Target Upside: -2.82% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 75 Outperform
• Price Target: $14.50 ▲(5.00%Upside)

Elanco Animal Health's overall stock score is driven by strong financial performance and bullish technical indicators. The company's solid earnings call results and strategic corporate changes further enhance its growth prospects. However, valuation concerns and external challenges like tariffs temper the score.

Positive Factors

Financial Performance

Elanco reported upside 1Q results, with sales of $1,193mn, Adj EBITDA of $276mn and Adj EPS of $0.37 all ahead of expectations.

Leadership

The hiring of Robert VanHimbergen as CFO makes logical sense due to his background in driving enterprise transformation at several industrial companies, which aligns with Elanco's focus on optimizing operations and reducing debt.

Product Launches

Elanco continues to focus on the progress of key product launches such as Experior, Bovaer, Credelio Quattro, and Zenrelia, which are significant for the company's future growth.

Negative Factors

Economic Risks

Risks to the thesis include a slowdown in the economy that negatively affects spending on companion animals.

Operational Challenges

If the Credelio Quattro and Zenrelia launches lag, then there is potential downside to constant-currency EBITDA growth this year.

Regulatory Challenges

Risks include execution on regulatory approvals and commercial launch of pipeline products, as well as livestock disease outbreaks and a shift away from usage of antibiotics in food animals.

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 through the sale of its diverse portfolio of animal health products. The company's primary revenue streams come from its two main sectors: companion animal and food animal products. In the companion animal segment, Elanco makes money by selling products such as parasiticides, vaccines, and therapeutics for pets, which are distributed through veterinary clinics, pet specialty retailers, and online platforms. In the food animal segment, Elanco earns income by offering products that enhance the health and productivity of livestock, including cattle, swine, and poultry, through channels such as direct sales to farms and partnerships with agricultural businesses. Key factors contributing to Elanco's earnings include strategic acquisitions to expand their product line, robust research and development efforts to bring new products to market, and partnerships with industry stakeholders to enhance distribution and market penetration.

Elanco Animal Health Financial Statement Overview

Summary

Elanco Animal Health shows resilience in profitability with improved net income margins, despite a slight dip in revenue. The balance sheet reflects moderate leverage with improved return on equity, though further liability reduction could enhance stability. Cash flow metrics are robust, indicating efficient cash management.

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
4.43B	4.44B	4.42B	4.42B	4.76B	3.27B
	Gross Profit
2.04B	1.91B	1.94B	2.50B	2.63B	1.61B
	EBIT
239.00M	251.00M	326.00M	358.00M	297.00M	101.50M
	EBITDA
626.00M	1.49B	-224.00M	866.00M	409.00M	-76.80M
	Net Income Common Stockholders
373.00M	338.00M	-1.23B	-74.00M	-472.00M	-560.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
487.00M	468.00M	352.00M	345.00M	638.00M	494.70M
	Total Assets
12.94B	12.61B	14.36B	15.49B	16.48B	17.69B
	Total Debt
4.39B	4.32B	5.77B	5.84B	6.32B	6.13B
	Net Debt
3.91B	3.85B	5.42B	5.49B	5.68B	5.63B
	Total Liabilities
6.59B	6.52B	8.14B	8.20B	8.95B	9.22B
	Stockholders Equity
6.35B	6.10B	6.22B	7.29B	7.54B	8.48B
Cash Flow		Free Cash Flow
341.00M	394.00M	117.00M	268.00M	286.00M	-351.90M
	Operating Cash Flow
535.00M	541.00M	271.00M	452.00M	483.00M	-41.00M
	Investing Cash Flow
1.06B	1.16B	-169.00M	-179.00M	-530.00M	-4.78B
	Financing Cash Flow
-1.41B	-1.49B	-83.00M	-549.00M	210.00M	4.95B

Elanco Animal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 13.81 is above the 20-day moving average (MA) of 13.44, above the 50-day MA of 11.31, and above the 200-day MA of 12.27, indicating a bullish trend. The MACD of 0.71 indicates Positive momentum. The RSI at 65.10 is Neutral, neither overbought nor oversold. The STOCH value of 69.35 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
ELAN	75 Outperform	$7.04B	18.43	6.01%	―	1.42%	―
HSIC	71 Outperform	$8.65B	21.82	11.78%	―	1.75%	8.76%
PRGO	63 Neutral	$3.76B	―	-3.64%	4.26%	-4.85%	-4290.31%
AMRX	56 Neutral	$2.49B	―	106.97%	―	13.42%	92.50%
LGND	55 Neutral	$2.21B	48.01	-16.56%	―	53.40%	-230.86%
Sector *	54 Neutral	$5.41B	3.27	-45.10%	3.29%	16.81%	0.02%
NEOG	46 Neutral	$1.22B	―	-16.71%	―	-2.50%	-30760.27%

Elanco Animal Health Corporate Events

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.

The most recent analyst rating on (ELAN) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Elanco Animal Health stock, see the ELAN Stock Forecast page.

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.

The most recent analyst rating on (ELAN) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Elanco Animal Health stock, see the ELAN Stock Forecast page.

Elanco Animal Health Announces Board Changes Amid New Agreement

Elanco Animal Health announced changes to its Board of Directors, with several members, including William Doyle, stepping down. Doyle’s resignation is linked to a new research agreement with Elanco through his entity, WEDterinary LLC, focusing on novel therapies for chronic kidney disease and life extension in pets. The agreement aims to leverage gene therapy and AI, enhancing Elanco’s innovation pipeline and positioning the company for long-term growth in the animal health industry.