# Eli Lilly and (LLY.US)

Canonical: https://gigainvestors.com/s/LLY

Analysis as of: 2026-10-16T07:29:52.771Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $1,251.61 per share; close as of 2026-10-15.

Estimated value: low $247.64 per share, central $350.23 per share, high $409.96 per share. Buy at or below the central value $350.23 per share. Valuation as of 2026-10-16T07:29:52.771Z; scenarios are not confidence intervals.

Expected annual return: 5.0% at the stated quote. About 5.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 1

- Operating margin variation: 0.26×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.21×

- FY2018: 0.28×

- FY2019: 0.27×

- FY2020: 0.29×

- FY2021: 0.28×

- FY2022: 0.30×

- FY2023: 0.32×

- FY2024: 0.38×

- FY2025: 0.46×

- LTM to Jun 2026: 0.50×

### moat: pass

- ROIC, median of available years: 38.0%

- ROIC, second-lowest year: 22.0%

- Typical minus recent gross margin: -3.3 pp

- Typical gross margin (annual median): 78.0%

- Recent gross margin (lower of latest and 3-year median): 81.3%

- Years with nonpositive capital: 0

- Capital spending / revenue: 9.8%

- ROIC including acquisitions, ten-year median: 22.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 22.0%

- FY2017: 21.5%

- FY2018: 37.4%

- FY2019: 43.0%

- FY2020: 41.8%

- FY2021: 39.8%

- FY2022: 38.5%

- FY2023: 30.7%

- FY2024: 36.8%

- FY2025: 42.6%

### economics: pass

- Owner earnings / net income, 5-yr: 0.90×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $44B

- Net income, five-year total: $48B

- Return on incremental invested capital: 50.5%

- Working capital / revenue, annual change: 0.8 pp

- Working capital / revenue, change between three-year averages: 5.1 pp

- Working capital / revenue, final three-year average: 41.8%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.86×

- FY2023: 0.26×

- FY2024: 1.00×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 22.0% vs 36.8%

- Per-share earnings: 2.26 to 11.71 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.7%

- Ordinary dilution, 5-year annual growth: -0.3%

- Market cap gain: $888B

- Cumulative retained earnings: $8.4B

- Diluted shares, 10-year annual growth: -1.7%

- Diluted shares, 5-year annual growth: -0.3%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 22.8%

- Per-share value change: $9.45

- Per-share value, starting three-year median: $2.26

- Per-share value, ending three-year median: $11.71

- Buybacks concentrated in cheaper years (correlation): 0.61

- Average buyback yield: 1.0%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $10B

- Cumulative net income, 10 years: $69B

- ROIC, first three-year median: 22.0%

- ROIC, last three-year median: 36.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.58

- FY2017: -$0.19

- FY2018: $3.13

- FY2019: $8.89

- FY2020: $6.79

- FY2021: $6.12

- FY2022: $6.90

- FY2023: $5.80

- FY2024: $11.71

- FY2025: $22.95

### accounting: pass

- Sloan accruals: 3.4%

- Receivables to sales index (DSRI): 1.05×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 3.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.81×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.47×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.4%

- FY2017: -12.9%

- FY2018: -5.2%

- FY2019: 8.9%

- FY2020: -0.7%

- FY2021: -3.4%

- FY2022: -1.7%

- FY2023: 1.6%

- FY2024: 2.3%

- FY2025: 3.4%

## Holders

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Allen Bond](https://gigainvestors.com/JIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Katz](https://gigainvestors.com/MAVFX): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 23.2% a year for ten years · "Eli Lilly Hits Highs on GLP-1 Medicare Inclusion, Huge Results" (finance.yahoo.com, Jul 2026) · sales +22.2%

Story as of 2026-10-16T09:59:04.907Z; price observation 2026-10-15.

Price needs cash profits to grow 23.2% a year for ten years

- 2025-04-17: Eli Lilly shares jump 12% on positive Phase 3 results for oral diabetes drug ([finance.yahoo.com](https://finance.yahoo.com/news/eli-lilly-shares-jump-12-114624413.html))

- 2025-05-01: Eli Lilly Lowers 2025 Earnings Outlook Despite Stronger-Than-Expected First-Quarter Results ([finance.yahoo.com](https://finance.yahoo.com/news/eli-lilly-lowers-2025-earnings-130652292.html))

- 2025-10-30: Lilly Beats on Q3 Earnings, Ups View, Mounjaro, Zepbound Drive Sales ([finance.yahoo.com](https://finance.yahoo.com/news/lilly-beats-q3-earnings-ups-165700217.html))

- 2025-11-07: LLY's GLP-1 Duo Boosts Sales Amid Rising Demand for Obesity Drugs ([finance.yahoo.com](https://finance.yahoo.com/news/llys-glp-1-duo-boosts-154400050.html))

- 2026-03-12: Eli Lilly warns of safety risks from compounded obesity drugs after finding impurity ([seekingalpha.com](https://seekingalpha.com/news/4563648-eli-lilly-warns-of-safety-risks-from-compounded-obesity-drugs-after-finding-impurity?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-05-01: Eli Lilly lifts 2026 revenue guidance as Q1 marks dominant opening ([finance.yahoo.com](https://finance.yahoo.com/sectors/healthcare/articles/eli-lilly-lifts-2026-revenue-103232730.html))

### Sales · FY2025–2026

sales +22.2%; source https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm; observed 2026-02-12.

- FY2017: $20B 

- FY2018: $21B 

- FY2019: $22B 

- FY2020: $25B 

- FY2021: $28B 

- FY2022: $29B 

- FY2023: $34B 

- FY2024: $45B 

- FY2025: $65B 

- FY2026: $80B 

### Gross margin · FY2025

gross margin 83%; source https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm; observed 2026-02-12.

- FY2016: 73.1% 

- FY2017: 77.7% 

- FY2018: 78.2% 

- FY2019: 78.8% 

- FY2020: 77.7% 

- FY2021: 74.2% 

- FY2022: 76.8% 

- FY2023: 79.2% 

- FY2024: 81.3% 

- FY2025: 83.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in drug manufacturers general; annual sales are USD 65.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm (filed 2026-02-12); FY2025: revenue 65179000000; grossProfit 54127000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); LLY.US: Eli Lilly and Company discovers, develops, manufactures, and markets human pharmaceutical products in the United States, Europe, China, Japan, and internationally. The company offers cardiometabolic health products, including Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity. It also provides oncology products, such as Cyramza for the second-line treatment of gastric cancer or gastro-esophageal junction adenocarcinoma; Erbitux for colorectal cancers and head and neck cancers; Inluriyo for breast cancer; Jaypirca for chronic lymphocytic leukemia or small lymphocytic lymphoma; Retevmo for the treatment of metastatic NSCLC; TYVYT for classic hodgkin's lymphoma; and Verzenio for breast cancer. In addition, the company offers immunology products, which include Ebglyss; Olumiant; Omvoh; and Taltz. Further, it provides Emgality for migraine prevention and episodic cluster headache; and Kisubla for symptomatic Alzheimer's disease. The company has collaborations with Boehringer Ingelheim Pharmaceuticals, Inc. for the Jardiance product family; and F. Hoffmann-La Roche Ltd and Genentech, Inc. for lebrikizumab, as well as license agreements with Almirall, S.A. for Ebglyss; and Chugai Pharmaceutical Co., Ltd for orforglipron; strategic collaboration with Ascidian Therapeutics for development of therapies for undisclosed monogenic kidney diseases; BioArctic AB (publ) for new treatment; QurCan Therapeutics Inc for development of PLNP-enabled genetic medicine therapeutics for the treatment of central nervous system and peripheral nervous system; and Abbisko Therapeutics for discovery and development of medicines across multiple targets. Eli Lilly and Company was founded in 1876 and is headquartered in Indianapolis, Indiana.

### Why customers stay

Margins ranged from 79.2% to 83% during 2023–25; it earns 38% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2023: grossProfit / revenue = 79.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2024: grossProfit / revenue = 81.3%.

- Source: https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm (filed 2026-02-12); FY2025: grossProfit / revenue = 83%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); 10-year return on capital observations [[2016,0.21963275758518355],[2017,0.21521998270367976],[2018,0.37395858580676117],[2019,0.42983546232468695],[2020,0.4176952918265393],[2021,0.3982387485407497],[2022,0.3853361166483538],[2023,0.30659449787937987],[2024,0.36751688833192087],[2025,0.4263406716142335]]; median 0.3796473512275575. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

The increased volume and lower realized prices in 2025 were primarily driven by Mounjaro and Zepbound.

- Source: https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm (filed 2026-02-12); Financial Results The following table summarizes certain financial information: Year Ended December 31, Percent Change 2025 2024 Revenue $ 65,179 $ 45,043 45 Net income 20,640 10,590 95 Earnings per share - diluted 22.95 11.71 96 Revenue increased in 2025 driven primarily by increased volume, partially offset by lower realized prices. The increased volume and lower realized prices in 2025 were primarily driven by Mounjaro and Zepbound. Net income and earnings per share increased in 2025, primarily due to higher gross margin, partially offset by increased marketing, selling, and administrative expenses and research and development expenses.

### Where the cash goes

Spends 28.3% of cash earnings on expansion; earns 50.5% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2016: growth capex 0; upkeep 1092000000; owner earnings 3142200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2018: growth capex 611539852.9409528; upkeep 2406660147.059047; owner earnings 2434339852.940953. Growth capex / owner earnings = 0.2512138361462327.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2019: growth capex 120900000; upkeep 1232600000; owner earnings 8318400000. Growth capex / owner earnings = 0.014534045008655511.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2020: growth capex 705200000; upkeep 1323900000; owner earnings 6193700000. Growth capex / owner earnings = 0.11385762952677721.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2021: growth capex 325600000; upkeep 1547600000; owner earnings 5581700000. Growth capex / owner earnings = 0.05833348263073974.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2022: growth capex 79169218.42315912; upkeep 2404830781.576841; owner earnings 5362469218.423159. Growth capex / owner earnings = 0.014763575360240285.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2023: growth capex 1989113235.1819077; upkeep 5402986764.818092; owner earnings 1364713235.1819077. Growth capex / owner earnings = 1.457532017645283.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2024: growth capex 3291000000; upkeep 1767000000; owner earnings 10590000000. Growth capex / owner earnings = 0.31076487252124646.

- Source: https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm (filed 2026-02-12); FY2025: growth capex 5844000000; upkeep 1997000000; owner earnings 20640000000. Growth capex / owner earnings = 0.28313953488372096.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Incremental return on capital 0.5046855191994002, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Dividend observations: [[2016,2158500000],[2017,2192100000],[2018,2311800000],[2019,2409800000],[2020,2687100000],[2021,3086800000],[2022,3535800000],[2023,4069300000],[2024,4680400000],[2025,5384000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm (filed 2026-02-12); FY2025: cash repurchases 4108000000 USD.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); LLY.US SharesStats.PercentInsiders = 0.156 percentage points; cache date 2026-10-16.

### What could break it

"Our long-term success depends on intellectual property protection" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm (filed 2026-02-12); Our long-term success depends on intellectual property protection

### What the price says

The price assumes cash profits grow 23.2% yearly over ten years; actual growth was 26.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Ten-year compound average after fade. Initial solved rate 0.32531019659335614. Price 1251.61; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 2.1906424771057775 → FY2025 22.951184254420106. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $73.84 per share

- 2016-11: $67.12 per share

- 2016-12: $73.55 per share

- 2017-01: $77.03 per share

- 2017-02: $82.81 per share

- 2017-03: $84.11 per share

- 2017-04: $82.06 per share

- 2017-05: $79.57 per share

- 2017-06: $82.30 per share

- 2017-07: $82.66 per share

- 2017-08: $81.29 per share

- 2017-09: $85.54 per share

- 2017-10: $81.94 per share

- 2017-11: $84.64 per share

- 2017-12: $84.46 per share

- 2018-01: $81.45 per share

- 2018-02: $77.02 per share

- 2018-03: $77.37 per share

- 2018-04: $81.07 per share

- 2018-05: $85.04 per share

- 2018-06: $85.33 per share

- 2018-07: $98.81 per share

- 2018-08: $105.65 per share

- 2018-09: $107.31 per share

- 2018-10: $108.44 per share

- 2018-11: $118.64 per share

- 2018-12: $115.72 per share

- 2019-01: $119.86 per share

- 2019-02: $126.29 per share

- 2019-03: $129.76 per share

- 2019-04: $117.04 per share

- 2019-05: $115.94 per share

- 2019-06: $110.79 per share

- 2019-07: $108.95 per share

- 2019-08: $112.97 per share

- 2019-09: $111.83 per share

- 2019-10: $113.95 per share

- 2019-11: $117.35 per share

- 2019-12: $131.43 per share

- 2020-01: $139.64 per share

- 2020-02: $126.13 per share

- 2020-03: $138.72 per share

- 2020-04: $154.64 per share

- 2020-05: $152.95 per share

- 2020-06: $164.18 per share

- 2020-07: $150.29 per share

- 2020-08: $148.39 per share

- 2020-09: $148.02 per share

- 2020-10: $130.46 per share

- 2020-11: $145.65 per share

- 2020-12: $168.84 per share

- 2021-01: $207.97 per share

- 2021-02: $204.89 per share

- 2021-03: $186.82 per share

- 2021-04: $182.77 per share

- 2021-05: $199.74 per share

- 2021-06: $229.52 per share

- 2021-07: $243.50 per share

- 2021-08: $258.29 per share

- 2021-09: $231.05 per share

- 2021-10: $254.76 per share

- 2021-11: $248.04 per share

- 2021-12: $276.22 per share

- 2022-01: $245.39 per share

- 2022-02: $249.95 per share

- 2022-03: $286.37 per share

- 2022-04: $292.13 per share

- 2022-05: $313.44 per share

- 2022-06: $324.23 per share

- 2022-07: $329.69 per share

- 2022-08: $301.23 per share

- 2022-09: $323.35 per share

- 2022-10: $362.09 per share

- 2022-11: $371.08 per share

- 2022-12: $365.84 per share

- 2023-01: $344.15 per share

- 2023-02: $311.22 per share

- 2023-03: $343.42 per share

- 2023-04: $395.86 per share

- 2023-05: $429.46 per share

- 2023-06: $468.98 per share

- 2023-07: $454.55 per share

- 2023-08: $554.20 per share

- 2023-09: $537.13 per share

- 2023-10: $553.93 per share

- 2023-11: $591.04 per share

- 2023-12: $582.92 per share

- 2024-01: $645.61 per share

- 2024-02: $753.68 per share

- 2024-03: $777.96 per share

- 2024-04: $781.10 per share

- 2024-05: $820.34 per share

- 2024-06: $905.38 per share

- 2024-07: $804.27 per share

- 2024-08: $960.02 per share

- 2024-09: $885.94 per share

- 2024-10: $829.74 per share

- 2024-11: $795.35 per share

- 2024-12: $772.00 per share

- 2025-01: $811.08 per share

- 2025-02: $920.63 per share

- 2025-03: $825.91 per share

- 2025-04: $898.95 per share

- 2025-05: $737.67 per share

- 2025-06: $779.53 per share

- 2025-07: $740.07 per share

- 2025-08: $732.58 per share

- 2025-09: $763.00 per share

- 2025-10: $862.86 per share

- 2025-11: $1,075.47 per share

- 2025-12: $1,074.68 per share

- 2026-01: $1,037.15 per share

- 2026-02: $1,051.99 per share

- 2026-03: $919.77 per share

- 2026-04: $934.60 per share

- 2026-05: $1,105.00 per share

- 2026-06: $1,199.43 per share

- 2026-07: $1,148.84 per share

- 2026-08: $1,156.73 per share

- 2026-09: $1,157.08 per share

- 2026-10: $1,251.61 per share

## Annual estimated value (USD per share)

- FY2016: low $37.63 per share, central $42.09 per share, high $48.03 per share

- FY2017: low $31.53 per share, central $34.88 per share, high $39.33 per share

- FY2018: low $33.01 per share, central $37.27 per share, high $42.24 per share

- FY2019: low $32.91 per share, central $37.50 per share, high $43.22 per share

- FY2020: low $48.16 per share, central $55.73 per share, high $64.25 per share

- FY2021: low $72.95 per share, central $85.45 per share, high $98.83 per share

- FY2022: low $72.82 per share, central $86.41 per share, high $100.30 per share

- FY2023: low $83.87 per share, central $95.09 per share, high $110.03 per share

- FY2024: low $134.37 per share, central $187.96 per share, high $220.16 per share

- FY2025: low $200.85 per share, central $284.07 per share, high $332.53 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:35:37.618Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/59478/000005947826000013/lly-20251231.htm); period 2025-12-31, filed 2026-02-12.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.