One-glance verdict
Overvalued
$1.29 our estimate vs market $23.06
Wall Street consensus: $30.23 (2,239.9% higher than our fair-value estimate)
1685% above our estimate, beyond the bull case
Fundamentals snapshot
Elanco Animal Health Incorporated
ELAN · NYQ · Healthcare · Drug Manufacturers - Specialty & Generic
Current price
$23.06
52-week range
$19.40 - $27.98
Market cap
$11.52B
Balance sheet
Stretched
1.15x Concerning
Net debt $3.70B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 6.5% last year.
- Reward Free cash flow was positive in 9/10 years.
- Risk Return on equity was -3.0% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 8.7% to 8.6% over 3 years.
What this company does
Elanco Animal Health Incorporated
Elanco Animal Health Incorporated makes medicines and treatments for both pets like dogs and cats, and farm animals to keep them healthy and productive. Their main money comes from selling these products globally to veterinarians and pet owners, which matters because healthy animals mean healthier food supplies and happier pets. They offer a wide range of products, from flea and tick prevention for pets to vaccines and antibiotics for farm animals.
How the company got here
Elanco Animal Health started in 1954 as a division of Eli Lilly and Company, a large pharmaceutical company. For decades, it operated as a part of Eli Lilly, focusing on developing medicines and health products for animals. In 2018, Elanco became an independent company, spinning off from Eli Lilly to focus solely on the animal health market. This move allowed Elanco to dedicate its resources and strategy entirely to innovation and growth within the animal health sector, aiming to become a leader in its field.
What it actually does
Elanco Animal Health creates and sells a wide variety of products designed to keep both pets and farm animals healthy and well. Think of them as a healthcare company, but for animals instead of people. They develop medicines, vaccines, and treatments to prevent and treat diseases, control parasites like fleas and ticks, and improve the overall well-being of animals. Their products help pet owners keep their furry companions healthy and assist farmers in raising livestock like cattle, pigs, and poultry more effectively and humanely.
Pet Health
This part of Elanco focuses on keeping our beloved pets, like dogs and cats, healthy and free from harm. They offer a range of products including treatments that protect pets from pesky fleas, ticks, and internal worms, which can cause discomfort and illness. Elanco also provides vaccines to prevent serious diseases and medicines to treat conditions such as pain, skin issues, and heart problems. These products are crucial for pet owners who want to ensure their animals live long, happy, and healthy lives.
Farm Animal Health
Elanco's farm animal health business is dedicated to supporting the health and productivity of livestock such as cattle, swine, and poultry. They provide essential products that help farmers prevent and treat diseases, improve nutrition, and ensure the overall well-being of their animals. This includes things like medicated feed additives and vaccines that help animals grow healthily and reduce the risk of illness spreading within herds or flocks. By keeping farm animals healthy, Elanco plays a role in ensuring a safe and abundant food supply.
What management is betting on now
Elanco's leadership is focused on strengthening its position in the animal health market through innovation and strategic acquisitions. They are investing in developing new and improved products for both pets and farm animals, aiming to address unmet needs in disease prevention and treatment. A key priority is expanding their portfolio of innovative therapies and preventative solutions, which can lead to better animal welfare and more efficient farming practices. Management believes that by focusing on these areas, Elanco can achieve sustainable growth and deliver value to both animal owners and shareholders.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$120.00M
FY2024 Q4
$130.00M
FY2025 Q1
$-69.00M
FY2025 Q2
$180.00M
FY2025 Q3
$127.00M
FY2025 Q4
$46.00M
FY2026 Q1
$-38.00M
FY2026 Q2
$244.00M
Revenue
$1.37B
Net income
$54.00M
Diluted EPS
0.11
Operating cash flow
$277.00M
Free cash flow
$244.00M
Fetching…
Sources
Revenue
$1.37B
Net income
$57.00M
Diluted EPS
0.11
Operating cash flow
$13.00M
Free cash flow
$-38.00M
Fetching…
Sources
Revenue
$1.14B
Net income
$-276.00M
Diluted EPS
-0.55
Operating cash flow
$108.00M
Free cash flow
$46.00M
Fetching…
Sources
Revenue
$1.14B
Net income
$-34.00M
Diluted EPS
-0.07
Operating cash flow
$219.00M
Free cash flow
$127.00M
Fetching…
Sources
Revenue
$1.24B
Net income
$11.00M
Diluted EPS
0.02
Operating cash flow
$237.00M
Free cash flow
$180.00M
Fetching…
Sources
Revenue
$1.19B
Net income
$67.00M
Diluted EPS
0.13
Operating cash flow
$-4.00M
Free cash flow
$-69.00M
Fetching…
Sources
Revenue
$1.02B
Net income
$-8.00M
Diluted EPS
-0.01
Operating cash flow
$177.00M
Free cash flow
$130.00M
Fetching…
Sources
Revenue
$1.03B
Net income
$364.00M
Diluted EPS
0.73
Operating cash flow
$162.00M
Free cash flow
$120.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $1.29 vs current price $23.06
Wall Street consensus is the average analyst price target: $30.23 (2,239.9% higher than our fair-value estimate).
Our most-likely fair value is $1.29 a share — about 94.4% below today's price of $23.06, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $3.7B. Interest coverage 1.1x.
Net debt
$3.70B
Interest coverage
1.15x
Elanco Animal Health Incorporated's profit covers its interest bill about 1.1 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
ELAN
BASELINE
Elanco Animal Health Incorporated
Total debt $4.23B Interest coverage 1.15x This is the baseline the peer rows are being compared against.
Total debt $9.26B Interest coverage 16.20x +1,315% vs ELAN Carries about 14.1x more debt cushion than ELAN.
Total debt $1.10B Interest coverage 35.01x +2,956% vs ELAN Carries about 30.6x more debt cushion than ELAN.
Total debt $795.65M Interest coverage 4.41x +285% vs ELAN Carries about 3.8x more debt cushion than ELAN.
Total debt — Interest coverage 16.29x +1,322% vs ELAN Carries about 14.2x more debt cushion than ELAN.
Total debt $0.00 Interest coverage 93.11x +8,029% vs ELAN Carries about 81.3x more debt cushion than ELAN.
What you should know
The case for and against ELAN
2 Rewards
2 Risks
Rewards
-
Revenue grew 6.5% last year.
-
Free cash flow was positive in 9/10 years.
Risks
-
Return on equity was -3.0% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 8.7% to 8.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
18.12x
P/B
1.75x
P/S
2.29x
EV/EBITDA
15.12x
PEG ratio
4.04x
Profitability
How much profit each dollar creates
Gross margin
55.4%
Operating margin
8.6%
Net margin
-4.0%
ROE
-3.0%
ROA
1.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.64x
Current ratio
2.05x
Quick ratio
0.91x
Total debt
$4.23B
Total cash
$530.00M
Growth
How the business has been compounding
Revenue TTM
$5.02B
Revenue 5Y CAGR
-0.3%
EPS TTM
-0.41
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$617.00M
Free CF TTM
$284.00M
FCF margin
5.7%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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