Is Elanco Animal Health, Inc. overvalued or undervalued?

As of 11 August 2025, the valuation grade for Elanco Animal Health, Inc. has moved from fair to expensive. The company appears to be overvalued based on its current metrics. Key valuation ratios include a P/E ratio of 14, an EV to EBITDA of 12.07, and a Price to Book Value of 1.09. In comparison, peers such as Illumina, Inc. have a P/E of 19.09 and BioMarin Pharmaceutical, Inc. shows a P/E of 15.17, indicating that Elanco's valuation is relatively high against its industry counterparts.
In terms of recent performance, Elanco has outperformed the S&P 500 with a year-to-date return of 57.72% compared to the S&P 500's 12.22%. However, over the past three years, Elanco's return of 29.49% significantly lags behind the S&P 500's 70.41%, reflecting a concerning trend for long-term investors. Overall, the combination of high valuation ratios and mixed performance against peers suggests that Elanco Animal Health, Inc. is currently overvalued.