Taking everything into account, ELAN scores 4 out of 10 in our fundamental rating. ELAN was compared to 190 industry peers in the Pharmaceuticals industry. ELAN has a medium profitability rating, but doesn't score so well on its financial health evaluation. ELAN is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ELAN was profitable.
ELAN had a positive operating cash flow in the past year.
ELAN had negative earnings in 4 of the past 5 years.
ELAN had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

ELAN has a Return On Assets of 0.27%. This is in the better half of the industry: ELAN outperforms 78.42% of its industry peers.
ELAN's Return On Equity of 0.53% is fine compared to the rest of the industry. ELAN outperforms 80.00% of its industry peers.
With a decent Return On Invested Capital value of 1.38%, ELAN is doing good in the industry, outperforming 77.89% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ELAN is significantly below the industry average of 12.83%.

		Industry Rank	Sector Rank
ROA	0.27%
ROE	0.53%
ROIC	1.38%

ROA(3y)-2.13%

ROA(5y)-2.51%

ROE(3y)-5.1%

ROE(5y)-5.7%

ROIC(3y)1.73%

ROIC(5y)N/A

1.3 Margins

ELAN's Profit Margin of 0.78% is fine compared to the rest of the industry. ELAN outperforms 78.42% of its industry peers.
ELAN's Profit Margin has improved in the last couple of years.
ELAN has a better Operating Margin (5.25%) than 78.95% of its industry peers.
In the last couple of years the Operating Margin of ELAN has declined.
With a decent Gross Margin value of 54.96%, ELAN is doing good in the industry, outperforming 66.84% of the companies in the same industry.
In the last couple of years the Gross Margin of ELAN has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	5.25%
PM (TTM)	0.78%
GM	54.96%

OM growth 3Y-3.95%

OM growth 5Y-14.04%

PM growth 3YN/A

PM growth 5Y28.06%

GM growth 3Y-0.22%

GM growth 5Y1.04%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ELAN is destroying value.
The number of shares outstanding for ELAN has been increased compared to 1 year ago.
The number of shares outstanding for ELAN has been increased compared to 5 years ago.
ELAN has a better debt/assets ratio than last year.

2.2 Solvency

ELAN has an Altman-Z score of 1.46. This is a bad value and indicates that ELAN is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.46, ELAN perfoms like the industry average, outperforming 56.32% of the companies in the same industry.
The Debt to FCF ratio of ELAN is 11.12, which is on the high side as it means it would take ELAN, 11.12 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 11.12, ELAN is in the better half of the industry, outperforming 78.95% of the companies in the same industry.
ELAN has a Debt/Equity ratio of 0.59. This is a neutral value indicating ELAN is somewhat dependend on debt financing.
ELAN's Debt to Equity ratio of 0.59 is on the low side compared to the rest of the industry. ELAN is outperformed by 66.84% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.59
Debt/FCF	11.12
Altman-Z	1.46

ROIC/WACC0.16

WACC8.7%

2.3 Liquidity

A Current Ratio of 2.40 indicates that ELAN has no problem at all paying its short term obligations.
ELAN's Current ratio of 2.40 is in line compared to the rest of the industry. ELAN outperforms 44.21% of its industry peers.
A Quick Ratio of 1.23 indicates that ELAN should not have too much problems paying its short term obligations.
ELAN has a worse Quick ratio (1.23) than 72.63% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.4
Quick Ratio	1.23

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ELAN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.94%, which is quite good.
Measured over the past years, ELAN shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.01% on average per year.
ELAN shows a small growth in Revenue. In the last year, the Revenue has grown by 3.08%.
ELAN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.65% yearly.

EPS 1Y (TTM)12.94%

EPS 3Y-4.66%

EPS 5Y-3.01%

EPS Q2Q%46.15%

Revenue 1Y (TTM)3.08%

Revenue growth 3Y-2.33%

Revenue growth 5Y7.65%

Sales Q2Q%10.39%

3.2 Future

The Earnings Per Share is expected to grow by 10.39% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.96% on average over the next years.

EPS Next Y5.08%

EPS Next 2Y7.64%

EPS Next 3Y9.24%

EPS Next 5Y10.39%

Revenue Next Year5.5%

Revenue Next 2Y5.59%

Revenue Next 3Y5.48%

Revenue Next 5Y4.96%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 25.65, the valuation of ELAN can be described as expensive.
Based on the Price/Earnings ratio, ELAN is valued a bit cheaper than 78.42% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.82. ELAN is around the same levels.
Based on the Price/Forward Earnings ratio of 23.35, the valuation of ELAN can be described as rather expensive.
Based on the Price/Forward Earnings ratio, ELAN is valued a bit cheaper than 75.26% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.95. ELAN is around the same levels.

		Industry Rank	Sector Rank
PE	25.65
Fwd PE	23.35

4.2 Price Multiples

80.53% of the companies in the same industry are more expensive than ELAN, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ELAN is valued a bit cheaper than 80.00% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	33.79
EV/EBITDA	17.29

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.

PEG (NY)5.05

PEG (5Y)N/A

EPS Next 2Y7.64%

EPS Next 3Y9.24%

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5. Dividend

5.1 Amount

No dividends for ELAN!.

		Industry Rank	Sector Rank
Dividend Yield	0%

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ELANCO ANIMAL HEALTH INC / ELAN FAQ

What is the ChartMill fundamental rating of ELANCO ANIMAL HEALTH INC (ELAN) stock?

ChartMill assigns a fundamental rating of 4 / 10 to ELAN.

Can you provide the valuation status for ELANCO ANIMAL HEALTH INC?

ChartMill assigns a valuation rating of 4 / 10 to ELANCO ANIMAL HEALTH INC (ELAN). This can be considered as Fairly Valued.

Can you provide the profitability details for ELANCO ANIMAL HEALTH INC?

ELANCO ANIMAL HEALTH INC (ELAN) has a profitability rating of 5 / 10.

Can you provide the financial health for ELAN stock?

The financial health rating of ELANCO ANIMAL HEALTH INC (ELAN) is 3 / 10.

Can you provide the expected EPS growth for ELAN stock?

The Earnings per Share (EPS) of ELANCO ANIMAL HEALTH INC (ELAN) is expected to grow by 5.08% in the next year.