Eli Lilly stock (NYSE: LLY) is gaining momentum on Thursday, April 17th, following the company’s announcement of successful results from the first of its late-stage trials for a daily obesity pill. The trial met its primary objectives, showing the pill’s effectiveness in helping patients with Type 2 diabetes achieve improved blood sugar control and weight loss. Importantly, the pill demonstrated a safety profile on par with leading injectable drugs currently available, such as Novo Nordisk’s Ozempic.
This marks a significant milestone for Eli Lilly. The convenience of a daily pill, as opposed to an injectable treatment like Ozempic, could provide a notable edge if the drug secures regulatory approval, potentially giving Eli Lilly a competitive advantage over rival Novo Nordisk.
Considering this positive development and the resulting stock surge, the key question is whether Eli Lilly is worth buying at around $820. Our analysis indicates that it is. We reached this conclusion by evaluating Eli Lilly’s current valuation against its recent operating results and both current and historical financial conditions. Our review, based on factors such as Growth, Profitability, Financial Stability, and Downturn Resilience, shows that Eli Lilly exhibits exceptional operating performance and a solid financial standing, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Separately check out – Where Is UNH Stock Headed After The Q1 Slump?
How Does Eli Lilly’s Valuation Look vs. The S&P 500?
When evaluated on a per-dollar basis for sales or profit, LLY stock appears highly expensive compared to the broader market.
- Eli Lilly has a price-to-sales (P/S) ratio of 16.6 versus 2.8 for the S&P 500
- It trades at a price-to-earnings (P/E) ratio of 70 compared to 22 for the S&P 500
How Have Eli Lilly’s Revenues Grown Over Recent Years?
Eli Lilly’s Revenues have seen substantial growth in recent years.
- Eli Lilly’s revenue has grown at an average annual rate of 17.4% over the past three years (vs. 6.2% for the S&P 500)
- Revenue rose 32.0% from $34 billion to $45 billion over the past year (vs. 5.3% growth for the S&P 500)
- Quarterly revenue climbed 44.7% to $14 billion in the latest quarter from $9.4 billion a year ago (vs. 4.9% gain for the S&P 500)
How Profitable Is Eli Lilly?
Eli Lilly’s margins exceed those of most firms covered by Trefis.
Does Eli Lilly Look Financially Stable?
Eli Lilly’s financials appear strong.
- Debt stood at $34 billion at the end of the most recent quarter, compared to a market cap of $661 billion (as of 4/16/2025), resulting in a very low Debt-to-Equity Ratio of 4.9% (vs. 21.5% for the S&P 500) [Note: Lower is better]
- Cash and equivalents totaled $3.4 billion, representing just 4.3% of total assets ($79 billion), compared to 15.0% for the S&P 500
How Resilient Is LLY Stock During A Downturn?
LLY stock has held up better than the S&P 500 during several recent downturns. Concerned about how LLY performs in a crash? See our dashboard How Low Can Eli Lilly and Stock Go In A Market Crash? for deeper analysis. Also check out this overview of market crashes.
Inflation Shock (2022)
- LLY dropped 15.0% from $276.22 (Jan 1, 2022) to $234.69 (Feb 14, 2022), compared to a 25.4% drop for the S&P 500
- Recovered fully by March 16, 2022
- Peaked at $960.02 on September 2, 2024, and currently trades near $730
Covid Pandemic (2020)
- LLY fell 19.2% from $147.35 (Feb 5, 2020) to $119.05 (Mar 23, 2020), vs. a 33.9% drop for the S&P 500
- Fully rebounded by April 14, 2020
Global Financial Crisis (2008)
- LLY declined 54.6% from $60.56 (Apr 20, 2007) to $27.47 (Mar 5, 2009), compared to a 56.8% fall for the S&P 500
- Recovered by April 21, 2014
Putting All The Pieces Together: What It Means For LLY Stock
To summarize, Eli Lilly scores as follows on key metrics:
- Growth: Extremely Strong
- Profitability: Very Strong
- Financial Stability: Strong
- Downturn Resilience: Strong
- Overall: Very Strong
Eli Lilly has delivered across the board. While its valuation may seem stretched, it appears justified by the company’s strong growth trajectory and compelling drug pipeline. With increasing demand for obesity treatments, Eli Lilly is positioning itself as a leader alongside Novo Nordisk. The potential approval of its daily diabetes pill may offer another tailwind. Despite today’s stock jump, we continue to rate LLY stock a strong buy. The average analyst price target of $1008 implies over 20% upside from current levels.
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