Elanco Animal Health (ELAN) AI Stock Analysis

• Market Cap: $9.74B
• Dividend Yield: N/A
• Average Volume (3M): 8.79M
• Price to Earnings (P/E): 22.5
• Beta (1Y): 1.38
• Revenue Growth: -0.18%
• EPS Growth: N/A
• Country: US
• Employees: 9,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.26
• Shares Outstanding: 496,813,700
• 10 Day Avg. Volume: 5,787,630
• 30 Day Avg. Volume: 8,793,267
• 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: 1.11
• Enterprise Value/Revenue: 2.41
• Enterprise Value/Gross Profit: 5.61
• Enterprise Value/Ebitda: 7.08
• 1Y Price Target: $19.19
• Price Target Upside: -2.14% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 72 Outperform
• Price Target: $19.50 ▼(-0.56% Downside)

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

Innovation Revenue Growth

Innovation is a key driver for Elanco, with significant revenue contributions. This growth in innovation revenue supports long-term competitive advantage and market leadership, enhancing Elanco's ability to deliver new products and solutions in the animal health industry.

Improved Leverage Ratio

The improvement in Elanco's leverage ratio indicates better financial health and reduced risk. Strong cash generation and operational efficiency contribute to this trend, providing the company with more flexibility to invest in growth opportunities and manage debt obligations.

Expanded Global Reach

The approval and launch of Zenrelia in multiple international markets enhance Elanco's global presence. This expansion supports long-term revenue growth by tapping into new markets and increasing product accessibility, which strengthens Elanco's competitive position worldwide.

Negative Factors

Impact of Tariffs

Tariffs pose a financial challenge, potentially impacting profitability. The need for mitigating actions indicates ongoing cost pressures, which could affect Elanco's ability to maintain margins and invest in growth initiatives, impacting long-term financial stability.

Increased Operating Expenses

Rising operating expenses can strain profitability and cash flow. While investments in product launches are strategic, the increased costs may pressure margins if revenue growth does not keep pace, potentially affecting Elanco's long-term financial health.

Decline in Gross Margin

A declining gross margin indicates cost pressures that could erode profitability. Inflation and higher manufacturing costs may persist, challenging Elanco's ability to maintain competitive pricing and margin sustainability, impacting long-term financial performance.

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 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 is showing signs of financial recovery with improved revenue growth and profitability margins in the TTM. The balance sheet is stabilizing with reduced leverage, and cash flow metrics indicate strong cash generation. While historical volatility in profitability and debt levels pose risks, the current trajectory suggests a positive outlook for the company.

Income Statement

Elanco Animal Health has shown a positive revenue growth trend in the TTM, with a Gross Profit Margin of 48.86% and a Net Profit Margin of 9.68%. The EBIT and EBITDA margins are healthy at 15.88% and 32.20%, respectively. However, the company has experienced fluctuations in profitability over the past years, with a significant net loss in 2023. Despite this, the recent improvements in margins and revenue growth indicate a recovery trajectory.

Balance Sheet

The company's Debt-to-Equity Ratio has improved to 0.62 in the TTM, indicating a reduction in leverage compared to previous years. The Return on Equity is modest at 6.74%, reflecting moderate profitability. The Equity Ratio stands at 49.29%, suggesting a stable financial structure. While the balance sheet shows signs of strengthening, the company still carries a significant amount of debt.

Cash Flow

Elanco's cash flow position has improved, with a Free Cash Flow Growth Rate of 4.11% in the TTM. The Operating Cash Flow to Net Income Ratio is 0.41, and the Free Cash Flow to Net Income Ratio is 0.62, indicating good cash generation relative to net income. The positive cash flow trends suggest improved operational efficiency and financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.48B	4.44B	4.42B	4.41B	4.76B	3.27B
Gross Profit	1.93B	1.91B	1.94B	1.97B	2.08B	1.25B
EBITDA	1.53B	1.49B	-224.00M	866.00M	409.00M	900.00K
Net Income	434.00M	338.00M	-1.23B	-78.00M	-483.00M	-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: 19.61
• 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 19.61 is above the 20-day moving average (MA) of 18.59, above the 50-day MA of 17.11, and above the 200-day MA of 13.15, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 65.70 is Neutral, neither overbought nor oversold. The STOCH value of 67.70 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	76 Outperform	63.60B	24.28	52.48%	1.35%	5.27%	13.72%
RDY	74 Outperform	11.79B	17.71	16.96%	0.64%	13.13%	-0.47%
ELAN	72 Outperform	$9.74B	22.47	6.83%	―	-0.18%	―
PAHC	66 Neutral	1.57B	32.06	16.89%	1.24%	27.37%	1898.99%
TEVA	58 Neutral	21.65B	-126.83	-30.46%	―	2.43%	64.37%
VTRS	54 Neutral	11.10B	-3.27	-3.40%	5.04%	-7.47%	-438.39%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

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.