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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Elanco Animal Health Incorporated (XNYS:ELAN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ELAN
Name:
ELANCO ANIMAL HEALTH INCORPORATED (XNYS:ELAN)
Sector:
- 81000.00K
Industry:
Drug Manufacturers�Specialty & Generic
CEO:
Mr. Jeffrey Simmons
Total Employees:
9,000
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 4135.59% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ELANCO ANIMAL HEALTH INCORPORATED(ELAN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�SPECIALTY & GENERIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
15.37
One Month Price Target:
$15.44
Six Month Price Target :
$15.82
Likely Price in One Year's Time:
Ticker:
$16.26
Likely Trading Range Today Under (Normal Volatility)
$15.29
Price Upper limit ($) :
$15.44
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$14.5
This week:
$13.42
This month :
$11.46
Other Primary facts
Market Cap:
6.93B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
474.11M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.6%
-16.47%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$19.43
$17.60
$11.31
$13.14
Medium risk (<10%) entry points
Buy Call
Sell Call
$17.00
Buy Put:
Sell Put:
$16.61
$13.73
$14.13
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ELAN
Sharpe Ratio:
-1.87%
Comparison:
ELAN, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -305.12% lower than the industry
& is -182.02% lower than the market/S&P 500 average
Average Returns/Yield of
ELAN
Daily returns:
-0.04%
Weekly returns:
-0.21%
Monthly returns:
-0.85%
Yearly returns:
14.20%
Comparison of returns:
Average annual returns/yield (last 3 years) is -171.88% below industry average
Classification:
ELAN, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.35
Statistical test of Returns:
ELAN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.75%
Weekly Volatility:
6.15%
Monthly Volatility:
12.29%
Yearly Volatility:
42.58%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.47%
Volatility in last five trading days has been -46.54% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.69%
Weekly VaR:
-12.72%
Monthly VaR:
-25.43%
How Much Can the price of
ELAN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-88.10%
This translates to price declining to:
$11.84
This translates to price declining to:
$1.83
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ELAN is a 79.51% riskier investment compared to the market/S&P 500 & is 53.78% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -26.91% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ELAN
Beta in relation to market/S&P 500--0.86
Expected beta in 1 year's time:
0.64
Expected beta in 3 year's time:
0.905
Unlevered (debt free) Beta:
0.509
Beta in relation to Nasdaq (XNAS):
0.758
Beta in relation to all global stocks::
0.737
Beta Comparison & Analysis
Beta of competitors/peers::
1.209
Beta is -28.59% lower than peers
Average Industry Beta:
1.054
Beta is -18.06% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.193
Alpha is -602.96% below industry average alpha yield
Alpha is -1227% below the market average
Analysis of Cost of Capital of
ELAN
Equity cost of capital:
0.091
Equity cost of capital is -12.57% below industry mean WACC
Unlevered (without debt) cost of capital:
5.34%
Before-tax cost of debt:
3.70%
After-tax cost of debt:
2.92%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.92%
WACC is -11.54% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$10.01
Revenue growth rate per share of (3Y):
0.96
Annual revenue growth rate is -99.99% below industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.47
-
-
Debt per share
$12.81
EBITDA per share
$1.06
Valuation Analysis Today of
ELAN
P/E Ratio:
0
P/E Ratio of Competitors/Peers:
13.2
P/E ratio is -100.00% lower than main peers & is higher than the industry
-
-
-
-
P/S (Price to Sales ratio):
1.53
Price to sales ratio is -78.32% below the industry mean
P/B (Price to book value ratio):
0.96
Price to free cash flow: 32.93
-
Net income growth rate (3Y):
-451.27%
Net income growth rate is -17.63% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
79.78%
Net debt to equity ratio:
76.09%
Debt to assets ratio:
37.37%
Net debt to assets ratio:
35.64%
Debt-to-asset ratio is -27.49% below industry average
Ability to repay debt:
Interest coverage ratio:
2.21
Interest coverage ratio is -68.24% less than industry average
Looking forward:
Debt growth rate:
3.14%
Annual debt growth is -52% lower than industry average debt growth rate
Debt repayment rate in last quarter: 3.98%
Analysis of Key Statistics
Correlation of price movement with the market:
0.562
Statistical significance of correlation:
ELAN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.408
Stock price is 37.73% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.408
Correlation of price movement with Nasdaq (^IXIC):
-0.01
Covariance of price movement with the market:
-0.015
Kurtosis
6.538
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.648
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
ELAN
Gross Profit Margin Ratio:
225%
Operating Profit Margin Ratio:
11.12%
Operating profit margin is -133.07% lower than the industry
Net Profit Margin Ratio:
225%
Effective Tax Rate:
12.74%
Effective tax rate is -2.15% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-4.77%
Return on equity (ROE) is -52.06% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-2.23%
Return on assets (ROA) is -40.14% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
2.44
Current ratio is -25.83% below industry average
Cash Conversion Cycle (days):
65.2
Cash conversion cycle is -56.94% below industry average
The remaining useful life of property plant & equipment is: 9.3 years
Stock based compensation to net income ratio:
-3.86%
In-depth Efficiency Analysis
Revenue generated per employee:
527.6K
Each employee generates -37% less revenue than industry average revenue per employee
EBITDA generated per employee:
55.7K
Each employee generates -41% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 40.3K
Each employee generates -139% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 9.0K
Each employee generates -84% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.5M
Each employee generates -84% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 12.84%
Growth rate in R&D investment/expenditure is 95.67% higher than the industry
Competitors/Peer firms of
ELAN
MOLINA HEALTHCARE, INC. (XNYS:MOH)
PERKINELMER, INC. (XNYS:PKI)
VARIAN MEDICAL SYSTEMS, INC. (XLON:0LNU)
QUEST DIAGNOSTICS INCORPORATED (XNYS:DGX)
OAK STREET HEALTH, INC. (XNYS:OSH)
BIO-B
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. (XNYS:CRL)
DAVITA INC. (XNYS:DVA)
UNIVERSAL HEALTH SERVICES, INC. (XNYS:UHS)
Current Analyst Ratings
Strong buy�4%
Buy�17%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.75B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.07B
2.67B
361.00M
-
1.38B
-
409.00M
2.15B
-
227.00M
690.00M
501.00M
528.00M
- 363000.00K
- 416000.00K
- 53000.00K
- 363000.00K
Statement of Cash Flow
Date:
Period:
176.00M
Differed Income Tax :
- 11000.00K
Stock Based Compensation :
14.00M
Change in Working Capital :
- 289000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
- 62000.00K
Investments in PP&E:
- 19000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
342.00M
-
342.00M
1.19B
1.35B
315.00M
3.19B
987.00M
6.12B
5.40B
-
-
559.00M
13.06B
-
16.25B
402.00M
61.00M
-
-
844.00M
1.31B
6.07B
1.26B
7.33B
-
8.64B
-
- 901000.00K
- 186000.0K
8.70B
March 31, 2022 at 6:00:00 AM
4.22B
7.61B
16.25B
-
6.13B
5.8B
-
- 10000.00K
- 29000.00K
- 252000.00K
-
-
-
52.00M
- 200000.00K
- 5000.00K
- 296000.00K
342.00M
638.00M
- 62000.00K
- 19000.00K
- 81000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ELAN
2023
2024
2025
2026
2027
$12.20
$12.90
$13.65
$14.44
$15.28