Is Elanco Animal Health, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Elanco Animal Health, Inc. has moved from very attractive to expensive, indicating a shift towards overvaluation. The company appears to be overvalued, with a P/E ratio of 14, an EV to EBITDA ratio of 12.07, and a PEG ratio of 0.03, which suggests that while growth expectations are low, the current price may not reflect its intrinsic value adequately.
In comparison to its peers, Elanco's P/E ratio of 19.25 is higher than BioMarin Pharmaceutical, Inc. at 15.17, which is considered fairly valued, and significantly higher than Halozyme Therapeutics, Inc. at 15.92. Despite strong recent performance, with a year-to-date return of 76.88% compared to the S&P 500's 13.30%, the long-term outlook appears less favorable, as the 5-year return for Elanco is -32.09% versus the S&P 500's 91.29%. This discrepancy reinforces the notion that Elanco may be overvalued at its current price.