Elanco Animal HealthELAN +3.45%66 Operating Margin % is 12.33% as of Mar. 2026, which is 79% above its 10-year median of 6.88. GuruFocus rates ELAN with a GF Score™ of 66/100 and a GF Value™ of $15.57 (Significantly Overvalued). The stock has 2 warning signs investors should review. Among 955 Drug Manufacturers companies, Elanco Animal Health ranks worse than 54.55% on this metric.
Elanco Animal Health (NYSE:ELAN) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Elanco Animal Health Operating Margin % Related Terms
Elanco Animal Health Operating Margin % Historical Data
* Premium members only.
The historical data trend for Elanco Animal Health's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ELAN vs RGC, NBIX, ALKS: Operating Margin % Comparison
For the Drug Manufacturers - Specialty & Generic subindustry, Elanco Animal Health's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Elanco Animal Health Operating Margin % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Elanco Animal Health's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Elanco Animal Health's Operating Margin % falls into.
Elanco Animal Health Operating Margin % Calculation
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Elanco Animal Health's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Elanco Animal Health (ELAN) has a Operating Margin % of 12.33% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Elanco Animal Health and its competitors. This is 79% above median its historical median of 6.88. According to the industry distribution chart, Elanco Animal Health ranks #521 out of 955 companies in the Drug Manufacturers industry, placing it in the top 54.6%.
Is Elanco Animal Health's Operating Margin % too high?
Elanco Animal Health's current Operating Margin % of 12.33% is 79% above median its 10-year median of 6.88. The Drug Manufacturers industry median Operating Margin % is 7.45. Elanco Animal Health's value of 12.33% is 65.5% above this industry median. Based on the distribution chart, Elanco Animal Health ranks #521 out of 955 companies in the Drug Manufacturers industry, which is below the industry midpoint. Overall, Elanco Animal Health has a GF Score™ of 66/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Elanco Animal Health's Operating Margin % compare to RGC and NBIX?
According to the Drug Manufacturers industry distribution chart, Elanco Animal Health ranks #521 out of 955 companies for Operating Margin %. This places Elanco Animal Health in the lower half of its industry. The industry median Operating Margin % is 7.45. Elanco Animal Health's value of 12.33% is 65.5% above this benchmark. While the company's 10-year median is 6.88 vs. the industry median of 7.45, Elanco Animal Health has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Drug Manufacturers company?
The median Operating Margin % among Drug Manufacturers companies is 7.45, based on 955 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Elanco Animal Health's current Operating Margin % of 12.33% is 65.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Elanco Animal Health and its competitors. For the Drug Manufacturers industry, the median Operating Margin % is 7.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Elanco Animal Health's current Operating Margin % is 12.33%, which is 79% above median its own 10-year median of 6.88. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Elanco Animal Health stock overvalued right now?
Based on GuruFocus' analysis, Elanco Animal Health (ELAN) is currently considered Significantly Overvalued. The stock's GF Value™ is $15.57, compared to a current price of $23.98 — trading 54% above its estimated fair value. The current Operating Margin % is 12.33%, which is 79% above median its 10-year median of 6.88 and 65.5% above the Drug Manufacturers industry median of 7.45. Elanco Animal Health's overall GF Score™ is 66/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Elanco Animal Health (ELAN), the current Operating Margin % is 12.33% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Elanco Animal Health (ELAN) Overvalued in 2026?
Based on GuruFocus' analysis, Elanco Animal Health stock appears to be overvalued.
The current stock price of $23.98 is trading 54% above its estimated GF Value™ of $15.57.
GuruFocus considers Elanco Animal Health to be Significantly Overvalued.
Key valuation signals for ELAN:
Operating Margin %: 12.33% (79% above median its 10-year median of 6.88)
GF Value™: $15.57 vs. price of $23.98 (54% above fair value)
Industry Position: 65.5% above the Drug Manufacturers median (#521 of 955)
No single metric tells the full story. See the ELAN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Elanco Animal Health is an animal health company that is engaged in developing, manufacturing, and marketing pharma products for companion and food animals. It spun off from Eli Lilly in 2018 and acquired Janssen Animal Health in 2011, Novartis Animal Health in 2014, Boehringer Ingelheim Vetmedica in 2017, and Bayer Animal Health in 2020. The company's operations are conducted globally, and it sells its products in over 90 countries. It offers a range of food animal products used in cattle, sheep, poultry, and swine production.
66GF Score
Get the complete analysis for ELAN
Operating Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
ELAN has been successfully added to your 
