MeritValue

Elanco Animal Health Inc

ELANdata completeness 100%10 fiscal years on file
The thesis, from the filings

Elanco Animal Health Inc earns about -1% on invested capital, below its ~9% cost of capital, with a roughly flat share count — no moat visible in the numbers. The estimate methods put fair value between $1.28 and $1.82 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$4.76B1$4.41B2$4.42B3$4.44B3$4.72B3
Net income−$483M4−$78M5−$1.23B6$338M6−$232M6
Operating cash flow$483M7$452M8$271M9$541M9$560M9
Capital expenditure$159M10$171M11$140M12$147M12$276M12
Free cash flow (derived)$324M7$281M8$131M9$394M9$284M9
Total debt$12.6B13$11.7B14$11.5B15$8.64B15$3.76B16
Cash & equivalents$638M17$345M18$352M19$468M20$545M20
Diluted shares487.2M488.3M492.3M497.3M496.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$131.89
your share of equity
Profit it earned you last year
−$4.67
Free cash flow it threw off
$5.72
Debt you’d be carrying
$75.79

10 shares is a claim on $131.89 of net worth that earned you −$4.67 and generated $5.72 of cash last year, against $75.79 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-1% avg · 5y
FY21 -1%FY22 1%FY23 -4%FY24 2%FY25 -2%

It earned about -1% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+2% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has fallen 70% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $1.28 and $1.82 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$1.28
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.4%
  • fcfBase$284M
DCF · Growth Exit 5Y
$1.82
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.4%
  • fcfBase$284M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.4%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $1.82
The three cases
Bear0.0%$1.69
Base0.4%$1.82
Bull5.4%$3.83

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.4%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001739104-24-000009 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001739104-25-000014 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001739104-26-000012 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001739104-24-000009 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001739104-25-000014 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001739104-26-000012 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001739104-24-000009 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001739104-25-000014 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001739104-26-000012 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001739104-24-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001739104-25-000014 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001739104-26-000012 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001739104-23-000004 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001739104-24-000009 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001739104-25-000014 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2025-12-31 · accession 0001739104-26-000012 (LongTermDebt)
  17. 10-K · period ending 2021-12-31 · accession 0001739104-23-000004 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001739104-24-000009 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001739104-25-000014 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001739104-26-000012 (CashAndCashEquivalentsAtCarryingValue)