SuperworthEli Lilly and Company LLY
- Market cap
- $1.1T
- PE
- 39.9×
- 10y median 41.3×
- Forward PE
- Price to sales
- 14.0×
- EV/EBIT
- 33.4×
- Revenue, 12 months
- $79.7B
- +50% on a year ago
- Net margin
- 33.5%
- Free cash flow yield
- 1.6%
Lilly's earnings caught up to its price
A stock that doubled while its PE fell by more than two thirds
It once traded at 140 times earnings
In July 2024 the PE reached 140, its highest in five years. The price was a bet that Mounjaro and Zepbound, Lilly's diabetes and obesity drugs, would keep growing fast. Since then, earnings have grown into much of that price.
Revenue went up two and a half times
From 32 billion to 80 billion dollars in three years. Obesity and diabetes treatment turned into one of the fastest revenue ramps a large drug company has ever had.
Earnings went up five and a half times
Over the last twelve months Lilly earned 29.80 dollars a share, up from 5.42 three years ago. Drug manufacturing has high fixed costs, so once volume clears them, profit grows far faster than sales. Operating margin reached 49.7 percent, the highest in ten years.
Free cash flow sank to zero, then took off
Twelve-month free cash flow was about 3.3 billion dollars three years ago. In early 2024 it briefly fell to minus 90 million, as building new factories used up almost all the cash the business made. It is now 18.2 billion.
The stock doubled and got cheaper
Market value doubled in three years while the PE fell to about 39. That is lower than on more than nine in ten days of the last five years, but close to its ten-year median. The stock now sits about 10% below its August 19 high.
On sales, it costs more than most of the decade
The PE looks low mainly against the last five years, when it ran far higher. Price to sales, the stock's value over a year of revenue, gives the longer view. At about 14 times revenue, Lilly costs more than on about 70% of days in the last ten years, where the median was about 9. Wider margins explain part of that.
The price assumes the growth keeps going
At about 28 times expected earnings for the next twelve months, Lilly sits near its ten-year median, but its seven industry peers trade at a median of about 17. Analysts expect adjusted earnings per share to rise about a third, which needs Mounjaro, Zepbound and the oral pill Foundayo to keep growing. Earlier forward PE is rebuilt from today's estimates. The October 29 report is the first test.
What has happened lately
- Eli Lilly, Lilly's oral GLP-1 Foundayo meets cardiovascular safety goal in its largest type 2 diabetes trialACHIEVE-4 in 2,749 patients showed non-inferior heart risk versus insulin glargine, clearing a safety hurdle for the oral pill Lilly is counting on for broad diabetes use.
- Eli Lilly, FDA approves Lilly's Onswik, a once-weekly basal insulin for adults with type 2 diabetesAdds a new diabetes product expected in the U.S. in the coming months, extending Lilly's cardiometabolic franchise beyond incretins into basal insulin.
- Eli Lilly, FDA approves Mounjaro to reduce cardiovascular risk in adults with type 2 diabetesAdds a heart-protection claim to Lilly's largest diabetes drug, based on a 13,299-patient trial with an 8% lower event rate than Trulicity, which can support coverage.
- Eli Lilly, Lilly reports second-quarter revenue of $23.0 billion, up 48%, and raises full-year guidanceFull-year revenue guidance moved to $85B-$87B, while non-GAAP EPS guidance was trimmed at the top end on acquisition-related charges.
Headlines link to the original source.
Charts
Financials
| Income statement | Q4 FY23 | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 | Q1 FY26 | Q2 FY26 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| $9.4B | $8.8B | $11.3B | $11.4B | $13.5B+45% | $12.7B+45% | $15.6B+38% | $17.6B+54% | $19.3B+43% | $19.8B+56% | $23B+48% | |
| Cost of revenue | $1.8B | $1.7B | $2.2B | $2.2B | $2.4B+34% | $2.2B+33% | $2.4B+13% | $3B+39% | $3.4B+40% | $3.6B+61% | $3.3B+34% |
| Gross profit | $7.6B | $7.1B | $9.1B | $9.3B | $11.1B+47% | $10.5B+48% | $13.1B+44% | $14.6B+57% | $15.9B+43% | $16.2B+54% | $19.7B+50% |
| R&D | $2.6B | $2.5B | $2.7B | $2.7B | $3B+18% | $2.7B+8% | $3.3B+23% | $3.5B+27% | $3.8B+26% | $3.5B+28% | $3.8B+15% |
| SG&A | $1.9B | $2B | $2.1B | $2.1B | $2.4B+26% | $2.5B+26% | $2.8B+30% | $2.7B+31% | $3.1B+29% | $2.9B+19% | $3.4B+25% |
| $3.2B | $2.7B | $4.4B | $4.4B | $5.7B+78% | $5.3B+94% | $7B+59% | $8.4B+89% | $9B+58% | $9.8B+84% | $12.5B+77% | |
| Interest expense | $138.2M | $179.6M | $183.6M | $192.7M | $224.7M+63% | $243.7M+36% | $249M+36% | $179.6M−7% | $123M−45% | $332M+36% | $345M+39% |
| Pre-tax income | $2.5B | $2.5B | $3.5B | $1.6B | $5B+101% | $3.5B+36% | $6.8B+93% | $7.2B+355% | $8.3B+64% | $8.8B+156% | $9.2B+36% |
| $318.9M | $293.2M | $550.2M | $618.1M | $628.5M+97% | $697M+138% | $1.1B+103% | $1.6B+167% | $1.6B+159% | $1.5B+109% | $2.2B+93% | |
| Net income | $2.2B | $2.2B | $3B | $970.3M | $4.4B+101% | $2.8B+23% | $5.7B+91% | $5.6B+475% | $6.6B+51% | $7.4B+168% | $7.1B+25% |
| $2.42 | $2.48 | $3.28 | $1.07 | $4.88+102% | $3.06+23% | $6.29+92% | $6.21+480% | $7.39+51% | $8.26+170% | $7.94+26% | |
| 904M | 903.8M | 904.2M | 905M | 903.2M−0% | 900.6M−0% | 899.8M−1% | 898.8M−1% | 898M−1% | 895.9M−1% | 893.7M−1% |
From each company's 10-Q and 10-K filings. Fiscal years are four fiscal quarters added up; balance sheet lines are as of the period's end. Growth is on the same period a year earlier.
Estimates
Next earnings report: .
Analyst consensus for the next eight quarters, with the range from the lowest to the highest estimate, is part of Superworth Pro.
Peers
Companies in Drug Manufacturers - General within ten times Eli Lilly and's size, closest in size first.
| Company | Market cap | PE | Its 10y median PE | Fwd PE | P/S | Revenue growth | Net margin |
|---|---|---|---|---|---|---|---|
| LLYEli Lilly and Company | $1.1T | 39.9× | 41.3× | 14.0× | +50% | 33.5% | |
| JNJJohnson & Johnson | $622.8B | 29.9× | 24.2× | 6.4× | +8% | 21.5% | |
| ABBVAbbVie Inc. | $479.5B | 76.7× | 27.5× | 7.4× | +10% | 9.8% | |
| MRKMerck & Co., Inc. | $352.3B | 114× | 25.7× | 5.3× | +5% | 4.8% | |
| AMGNAmgen Inc. | $223.3B | 25.7× | 21.0× | 5.9× | +9% | 23.0% | |
| PFEPfizer Inc. | $159.6B | 36.8× | 16.3× | 2.5× | −0% | 6.8% | |
| BMYBristol-Myers Squibb Company | $122B | 13.1× | 19.9× | 2.5× | +3% | 18.9% | |
| Peer median | $287.8B | 33.4× | 22.6× | 5.6× | +6% | 14.3% |
About
- Chief executive
- Dave Ricks, since 2017Joined 1996, CEO since 2017. Source
- Industry
- Drug Manufacturers - General
- Sector
- Healthcare
Valuation data, not investment advice. Prices as of .