Shares of animal health company Elanco (NYSE:ELAN)
jumped 21.2% in the afternoon session after the company reported decent first quarter 2025 results which beat analysts' EPS expectations and included constant currency revenue outperformance. Organic sales were up 4%, thanks to strong demand in cattle health and good traction from new pet meds like Credelio Quattro. Even though sales were flat, operating margins improved, a sign they're managing prices and costs pretty well.
Animal health company Elanco (NYSE:ELAN) reported Q1 CY2025 results beating Wall Street’s revenue expectations, but sales were flat year on year at $1.19 billion. The company’s full-year revenue guidance of $4.55 billion at the midpoint came in 1.1% above analysts’ estimates. Its non-GAAP profit of $0.37 per share was 21.5% above analysts’ consensus estimates.
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While profitability is essential, it doesn’t guarantee long-term success.
Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they’re out of favor.
The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it’s rotten.
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how pharmaceuticals stocks fared in Q4, starting with Elanco (NYSE:ELAN).
Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street.
Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
Elanco has gotten torched over the last six months - since September 2024, its stock price has dropped 28.5% to $10.39 per share. This was partly due to its softer quarterly results and might have investors contemplating their next move.
The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead.
They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
Animal health company Elanco (NYSE:ELAN) reported Q4 CY2024 results exceeding the market’s revenue expectations, but sales fell by 1.4% year on year to $1.02 billion. On the other hand, the company’s full-year revenue guidance of $4.48 billion at the midpoint came in 1.2% below analysts’ estimates. Its non-GAAP profit of $0.14 per share was in line with analysts’ consensus estimates.
