Eli Lilly Surprises with Strong Earnings, Sets Ambitious Future Goals

Eli Lilly (NYSE: LLY) delivered fourth-quarter results that exceeded expectations, reporting adjusted earnings of $5.32 per share compared to the forecast of $4.95. However, revenue totaled $13.5 billion, falling slightly short of the anticipated $13.6 billion, primarily due to lower price realization for Mounjaro.

Revenue Growth Driven by New Drug Success

Eli Lilly’s revenue of $13.5 billion marked an impressive 45% year-over-year increase. This surge was largely attributed to high demand for its obesity drug, Zepbound, which generated $1.9 billion in sales. Sales for Mounjaro rose 60% year-over-year to $3.5 billion, while Verzenio’s revenue climbed 36% to $1.6 billion. Despite strong growth, Zepbound and Mounjaro sales did not meet consensus estimates of $1.98 billion and $3.6 billion, respectively, as pricing challenges affected Mounjaro’s overall performance.

Margin Improvement Fuels Earnings

The company achieved a 90 basis points increase in gross margin to 83.2% in Q4. This improved margin, along with rising revenues, contributed to earnings of $5.32 per share, more than doubling from $2.49 in the same quarter last year. Looking ahead, Eli Lilly expects its revenue to fall between $58 billion and $61 billion, gross margin to range from 41.5% to 43.5%, and adjusted earnings to be between $22.50 and $24.00.

Strong Performance Against Market Trends

Eli Lilly’s stock has shown remarkable resilience, gaining 50% year-to-date, significantly outpacing the S&P 500’s 28% rise during the same period. This investor optimism is largely fueled by the high demand for its obesity treatments. Impressively, LLY has outperformed the broader market in each of the last four years, with returns of 66% in 2021, 34% in 2022, 61% in 2023, and 33% in 2024.

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Future Growth Potential and Analyst Optimism

Given the current economic climate and possible changes in interest rates and government policies, Eli Lilly seems poised for continued growth. At present, LLY stock sits at $870, trading at 17 times its trailing revenues, compared to an average P/S ratio of 14 over the past three years. This suggests potential for stock price appreciation, especially when contrasted with the analysts’ average price estimate of $980 for LLY, indicating a potential 12% upside from current levels.

Also see – What’s Happening With GOOG Stock?

While potential growth looks promising for LLY stock, it’s prudent to compare Eli Lilly with its peers based on key metrics that investors consider important. Valuable comparisons across industries can be found at Peer Comparisons.

[1] Returns as of 2/7/2025
[2] Cumulative total returns since the end of 2016

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.