Elanco Animal Health Incorporated
Elanco Animal Health Incorporated Fundamental Analysis
Elanco Animal Health Incorporated (ELAN) shows weak financial fundamentals with a PE ratio of 343.27, profit margin of 0.78%, and ROE of 0.55%. The company generates $4.6B in annual revenue with weak year-over-year growth of 0.50%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 26.8/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ELAN's fundamental strength across five key dimensions:
Efficiency Score
WeakELAN struggles to generate sufficient returns from assets.
Valuation Score
ModerateELAN shows balanced valuation metrics.
Growth Score
WeakELAN faces weak or negative growth trends.
Financial Health Score
ExcellentELAN maintains a strong and stable balance sheet.
Profitability Score
ModerateELAN maintains healthy but balanced margins.
Key Financial Metrics
Is ELAN Expensive or Cheap?
P/E Ratio
ELAN trades at 343.27 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ELAN's PEG of -3.75 indicates potential undervaluation.
Price to Book
The market values Elanco Animal Health Incorporated at 1.83 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 9.92 times EBITDA. This is generally considered low.
How Well Does ELAN Make Money?
Net Profit Margin
For every $100 in sales, Elanco Animal Health Incorporated keeps $0.78 as profit after all expenses.
Operating Margin
Core operations generate 5.25 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $0.55 in profit for every $100 of shareholder equity.
ROA
Elanco Animal Health Incorporated generates $0.27 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Elanco Animal Health Incorporated produces operating cash flow of $629.08M, showing steady but balanced cash generation.
Free Cash Flow
Elanco Animal Health Incorporated produces free cash flow of $362.05M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.73 in free cash annually.
FCF Yield
ELAN converts 2.93% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
343.27
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-3.75
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.83
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.69
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.60
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.40
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.006
vs 25 benchmark
ROA
Return on assets percentage
0.003
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How ELAN Stacks Against Its Sector Peers
| Metric | ELAN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 343.27 | 29.43 | Worse (Expensive) |
| ROE | 0.55% | 800.00% | Weak |
| Net Margin | 0.78% | -20145.00% (disorted) | Weak |
| Debt/Equity | 0.60 | 0.30 | Weak (High Leverage) |
| Current Ratio | 2.40 | 4.64 | Strong Liquidity |
| ROA | 0.27% | -17936.00% (disorted) | Weak |
ELAN outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Elanco Animal Health Incorporated's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.97%
Industry Style: Defensive, Growth, Innovation
GrowingEPS CAGR
271.83%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
80.32%
Industry Style: Defensive, Growth, Innovation
High Growth