LLY

LLY

Eli Lilly

Dividend / Cash flow

★ Quality 64/100
Overvalued

Price today

$1,149

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What this business is made of

64qualityReturnsMoatBalance sheetPricing powerReinvestment

The business

Lilly holds the patented recipe for the weight-loss drug half the world wants.

Eli Lilly makes prescription drugs. Today it lives off the GLP-1 boom: Mounjaro (diabetes) and Zepbound (obesity) grew +110% and +123% in Q4 2025. It charges per prescription, with gross margins of 83%.

Patents, manufacturing scale, and the first-mover edge in injectable GLP-1. Replicating tirzepatide takes a decade and billions in trials. The moat expires with the patent (~2036), not before.

Revenue history

$28.3B
2021
$28.5B
2022
$34.1B
2023
$45.0B
2024
$64.0B
2025
CAGR 5 años: +18%

From $28.3B to $64.0B in 4 years — nearly 2.3x its size. Selling more and more is the base of everything else.

Where each $100 of sales goes

Revenue $65.2B · FY2025

Cost of sales$11.1B · 17%
Operations$28.4B · 44%
Taxes and other$5.1B · 8%
Net profit$20.6B · 32%

Of every $100 in sales, $68 goes to costs and operations; $32 is left as net profit (32% margin).

Catalysts and risks

FDA approval of Orforglipron (oral GLP-1) in April 2026.

2026 guidance: sales $80-83B, growth +25%.

Manufacturing capacity expansion frees up FCF held back by capex.

⚠️

Tirzepatide patent cliff around 2036 — the clock is ticking.

⚠️

Direct competition from Novo Nordisk and the oral pipeline of Pfizer/Roche.

⚠️

Political pressure on drug prices in the US.

Charlie's note

Paying 30x for a pharma that lives off two molecules with a finite patent requires faith in the pipeline. The business is excellent today; the price assumes it stays that way in 2035.

Analysis · May 2026

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