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 overvalued based on its current metrics, with a P/E ratio of 14, an EV to EBITDA of 12.07, and a PEG ratio of 0.03, which suggests limited growth relative to its price. In comparison, peers such as Illumina, Inc. and BioMarin Pharmaceutical, Inc. have P/E ratios of approximately 19.25 and 15.17, respectively, indicating that Elanco's valuation is less favorable in the context of its industry.
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 optimistic, as evidenced by a 5-year return of -32.09% against the S&P's 91.29%. This disparity in long-term performance further supports the conclusion that Elanco Animal Health, Inc. is currently overvalued.