Elanco Animal Health (ELAN) AI Stock Analysis

• Market Cap: $6.29B
• Dividend Yield: N/A
• Average Volume (3M): 6.24M
• Price to Earnings (P/E): 16.9
• Beta (1Y): 1.43
• Revenue Growth: 1.42%
• EPS Growth: N/A
• Country: US
• Employees: 9,000
• Sector: Healthcare
• Sector Strength: 41
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.37
• Shares Outstanding: 496,646,500
• 10 Day Avg. Volume: 5,983,088
• 30 Day Avg. Volume: 6,244,973
• PEG Ratio: 0.27
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.31
• Enterprise Value/Market Cap: 1.56
• Enterprise Value/Revenue: 0.55
• Enterprise Value/Gross Profit: 4.80
• Enterprise Value/Ebitda: 12.17
• 1Y Price Target: $14.43
• Price Target Upside: 13.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 75 Outperform
• Price Target: $14.50 ▲( 14.53% Upside)

Elanco Animal Health is well-positioned with strong financial resilience and positive earnings call outcomes, highlighting growth and innovation. The technical analysis indicates a bullish trend, though caution is advised due to overbought conditions. Valuation is moderate, with potential for growth in light of strategic initiatives. Corporate events underscore a focus on innovation, enhancing the company's growth trajectory.

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.

Market Position

Elanco's comment that Quattro took 10% of first-quarter broad spectrum sales is materially ahead of expectations and suggests this could be a blockbuster product in year one.

Product Launch

The launch of new products like Experior and strong performance in Ruminants are driving increased revenue estimates.

Negative Factors

Operational Costs

Increased SG&A investments are expected to offset some of the topline growth, impacting earnings per share estimates.

Pet Health Segment

There was a slight miss in pet health sales, which remains a key investor focus.

Product Launch Risks

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

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 makes money primarily through the sale of its animal health products, which are broadly categorized into two segments: Companion Animal and Farm Animal. In the Companion Animal segment, revenue is generated from the sale of products such as flea and tick treatments, heartworm preventatives, and therapeutic drugs for pets. The Farm Animal segment focuses on products for livestock and poultry, including vaccines, nutritional supplements, and antibiotics, which help improve animal productivity and health. Elanco also engages in strategic partnerships and collaborations with veterinary clinics, agricultural producers, and research institutions to enhance product distribution and innovation, further contributing to its revenue streams. The company's earnings are influenced by factors such as global demand for protein, pet ownership trends, and regulatory approvals for new products.

Elanco Animal Health Financial Statement Overview

Summary

Elanco Animal Health's financial performance shows signs of recovery and stability. The income statement reflects improved profitability, while the balance sheet demonstrates healthier leverage levels. Cash flow generation is strong, underpinning financial flexibility. The company should continue focusing on operational efficiency and cash flow management to sustain growth and enhance shareholder value.

Income Statement

Elanco Animal Health shows a stable revenue base with a slight revenue growth of 0.5% for the latest year. The gross profit margin stands at 43.0%, indicating effective cost management. The net profit margin improved significantly from a loss to 7.6%, reflecting a turnaround in profitability. However, EBIT and EBITDA margins remain modest at 5.7%. The company needs to focus on enhancing operational efficiencies to sustain profitability.

Balance Sheet

The debt-to-equity ratio improved to 0.71, suggesting a better leverage position compared to previous years. ROE stands at 5.5%, indicating moderate returns for shareholders. The equity ratio of 48.3% highlights a balanced capital structure. The company's balance sheet is stabilizing, though further strengthening of equity would enhance financial resilience.

Cash Flow

Free cash flow grew significantly by 236.8% due to improved operating cash flows and reduced capital expenditures. The operating cash flow to net income ratio is robust at 1.60, indicating strong cash generation relative to earnings. The free cash flow to net income ratio of 1.17 further confirms healthy cash profitability. Continued focus on cash generation will support strategic investments and debt reduction.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.44B	4.42B	4.42B	4.76B	3.27B
	Gross Profit
1.91B	1.94B	2.50B	2.63B	1.61B
	EBIT
251.00M	326.00M	358.00M	297.00M	101.50M
	EBITDA
1.49B	-224.00M	866.00M	409.00M	-76.80M
	Net Income Common Stockholders
338.00M	-1.23B	-74.00M	-472.00M	-560.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
468.00M	352.00M	345.00M	638.00M	494.70M
	Total Assets
12.61B	14.36B	15.49B	16.48B	17.69B
	Total Debt
4.32B	5.77B	5.84B	6.32B	6.13B
	Net Debt
3.85B	5.42B	5.49B	5.68B	5.63B
	Total Liabilities
6.52B	8.14B	8.20B	8.95B	9.22B
	Stockholders Equity
6.10B	6.22B	7.29B	7.54B	8.48B
Cash Flow		Free Cash Flow
394.00M	117.00M	268.00M	286.00M	-351.90M
	Operating Cash Flow
541.00M	271.00M	452.00M	483.00M	-41.00M
	Investing Cash Flow
1.16B	-169.00M	-179.00M	-530.00M	-4.78B
	Financing Cash Flow
-1.49B	-83.00M	-549.00M	210.00M	4.95B

Elanco Animal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.66
• 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 12.66 is above the 20-day moving average (MA) of 11.61, above the 50-day MA of 10.45, and above the 200-day MA of 12.30, indicating a bullish trend. The MACD of 0.84 indicates Negative momentum. The RSI at 65.34 is Neutral, neither overbought nor oversold. The STOCH value of 36.35 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
HSIC	77 Outperform	$8.72B	22.27	11.78%	―	1.75%	8.76%
ELAN	75 Outperform	$6.29B	16.90	6.01%	―	1.42%	―
LGND	66 Neutral	$1.96B	48.01	-16.56%	―	53.40%	-230.86%
PRGO	63 Neutral	$3.65B	―	-3.64%	4.21%	-4.85%	-4290.31%
AMRX	57 Neutral	$2.24B	―	106.97%	―	13.42%	92.50%
Sector *	53 Neutral	$5.14B	3.03	-44.09%	2.83%	16.75%	-0.06%
NEOG	49 Neutral	$1.32B	―	-16.71%	―	-2.50%	-30760.27%

Elanco Animal Health Corporate Events

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.