What do the Fundamentals Predict for Elanco Animal Health Inc (ELAN) Stock?

InvestorsObserver gives Elanco Animal Health Inc (ELAN) a weak valuation score of 7 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. ELAN currently holds a better value than 7% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

ELAN gets a 7 Valuation Rank today. Find out what this means to you and get the rest of the rankings on ELAN!

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Metrics Analysis

ELAN has a trailing twelve month Price to Earnings (PE) ratio of -51.8. The historical average of roughly 15 shows a good value for ELAN stock as investors are paying lower share prices relative to the company's earnings. ELAN's low trailing PE ratio shows that the firm has been trading below its fair market value recently. Its trailing 12-month earnings per share (EPS) of -0.24 more than justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. ELAN currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 6.19. The market is currently overvaluing ELAN in relation to its projected growth due to the PEG ratio being above the fair market value of 1. ELAN's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

All together these valuation metrics paint a pretty poor picture for ELAN at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for ELAN are worse than the average of the market resulting in a valuation score of 7. Click Here to get the full Report on Elanco Animal Health Inc (ELAN) stock.