Is Elanco Animal Health, Inc. overvalued or undervalued?

As of 7 May 2025, the valuation grade for Elanco Animal Health, Inc. has moved from fair to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a P/E ratio of 14, an EV to EBITDA of 12.07, and a ROE of 8.05%.
When compared to peers, Elanco's P/E ratio of 13.22 is lower than that of BioMarin Pharmaceutical, Inc., which stands at 19.19, suggesting that Elanco is not as favorably valued in relation to its competitors. Additionally, Bio-Techne Corp. is categorized as very expensive with a P/E of 37.50, further highlighting Elanco's relative position in the market. Over the past year, Elanco has underperformed significantly, with a stock return of -26.04% compared to a 10.26% return for the S&P 500, reinforcing the notion that the stock may not be a compelling investment at its current valuation.