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Elanco Animal Health Incorporated (ELAN) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Elanco Animal Health Incorporated (ELAN - Free Report) ? Shares have been on the move with the stock up 20.2% over the past month. The stock hit a new 52-week high of $15.1 in the previous session. Elanco Animal Health Incorporated has gained 21.9% since the start of the year compared to the -2.4% move for the Zacks Medical sector and the 9.7% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2023, Elanco Animal Health Incorporated reported EPS of $0.18 versus consensus estimate of $0.12 while it beat the consensus revenue estimate by 2.89%.
For the current fiscal year, Elanco Animal Health Incorporated is expected to post earnings of $0.91 per share on $4.38 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $0.89 per share on $4.48 billion in revenues. This represents a year-over-year change of -1.79% and 2.37%, respectively.
Valuation Metrics
Elanco Animal Health Incorporated may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Elanco Animal Health Incorporated has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 16.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 5.7X versus its peer group's average of 9.8X. Additionally, the stock has a PEG ratio of 9.26. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Elanco Animal Health Incorporated currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Elanco Animal Health Incorporated passes the test. Thus, it seems as though Elanco Animal Health Incorporated shares could have potential in the weeks and months to come.
How Does ELAN Stack Up to the Competition?
Shares of ELAN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Encompass Health Corporation (EHC - Free Report) . EHC has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of C.
Earnings were strong last quarter. Encompass Health Corporation beat our consensus estimate by 11.69%, and for the current fiscal year, EHC is expected to post earnings of $3.83 per share on revenue of $4.79 billion.
Shares of Encompass Health Corporation have gained 0.5% over the past month, and currently trade at a forward P/E of 18.97X and a P/CF of 12.34X.
The Medical - Outpatient and Home Healthcare industry is in the top 13% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ELAN and EHC, even beyond their own solid fundamental situation.
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Elanco Animal Health Incorporated (ELAN) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Elanco Animal Health Incorporated (ELAN - Free Report) ? Shares have been on the move with the stock up 20.2% over the past month. The stock hit a new 52-week high of $15.1 in the previous session. Elanco Animal Health Incorporated has gained 21.9% since the start of the year compared to the -2.4% move for the Zacks Medical sector and the 9.7% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2023, Elanco Animal Health Incorporated reported EPS of $0.18 versus consensus estimate of $0.12 while it beat the consensus revenue estimate by 2.89%.
For the current fiscal year, Elanco Animal Health Incorporated is expected to post earnings of $0.91 per share on $4.38 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $0.89 per share on $4.48 billion in revenues. This represents a year-over-year change of -1.79% and 2.37%, respectively.
Valuation Metrics
Elanco Animal Health Incorporated may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Elanco Animal Health Incorporated has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 16.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 5.7X versus its peer group's average of 9.8X. Additionally, the stock has a PEG ratio of 9.26. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Elanco Animal Health Incorporated currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Elanco Animal Health Incorporated passes the test. Thus, it seems as though Elanco Animal Health Incorporated shares could have potential in the weeks and months to come.
How Does ELAN Stack Up to the Competition?
Shares of ELAN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Encompass Health Corporation (EHC - Free Report) . EHC has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of C.
Earnings were strong last quarter. Encompass Health Corporation beat our consensus estimate by 11.69%, and for the current fiscal year, EHC is expected to post earnings of $3.83 per share on revenue of $4.79 billion.
Shares of Encompass Health Corporation have gained 0.5% over the past month, and currently trade at a forward P/E of 18.97X and a P/CF of 12.34X.
The Medical - Outpatient and Home Healthcare industry is in the top 13% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ELAN and EHC, even beyond their own solid fundamental situation.