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We came across a bullish thesis on Eli Lilly and Company (LLY) on Substack by Kontra. In this article, we will summarize the bulls’ thesis on LLY. Eli Lilly and Company (LLY)'s share was trading at $794.10 as of May 1st. LLY’s trailing and forward P/E were 64.61 and 35.34 respectively according to Yahoo Finance.
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Eli Lilly (LLY) continues to solidify its position as a dominant force in the healthcare sector, particularly through its market-leading presence in the obesity and diabetes therapeutic areas. The company’s Q1 2025 earnings report reaffirmed its financial and operational strength, with revenue soaring 45% year-over-year to $12.7 billion, driven largely by the runaway success of its GLP-1-based treatments, Mounjaro and Zepbound. These two drugs alone are transforming Lilly’s growth profile and have propelled the company to a leadership position alongside Novo Nordisk in the obesity space, which is experiencing exponential growth. The strategic focus on high-margin, high-demand therapeutics is clearly paying off, with non-GAAP EPS growing 29% to $3.34 and gross margins improving to 83.5%. These results highlight not only robust demand but also Lilly’s disciplined cost control and operating leverage. The company’s capital return program remains generous, with $2.5 billion returned to shareholders through dividends and buybacks during the quarter, while long-term investments totaling $50 billion since 2020 demonstrate its commitment to expanding capacity and meeting growing global demand.
At the heart of Lilly’s strategy is innovation, reflected in its continued pipeline expansion. The acquisition of Scorpion Therapeutics’ PI3Kα inhibitor program bolsters Lilly’s oncology franchise, while internal developments like orforglipron—a promising oral GLP-1 candidate—are poised to deepen the company’s competitive moat. Phase 3 data for orforglipron showed significant weight loss and glycemic improvements on par with injectable GLP-1s, giving Lilly a potential blockbuster in oral form. Zepbound has already achieved a commanding 60%+ market share in the U.S. branded anti-obesity segment and 74% of new prescriptions, underscoring its market dominance. Despite short-term formulary headwinds such as CVS Caremark’s recent preference for competitor Wegovy, Lilly’s diversified portfolio and superior clinical outcomes offer resilience. Its global market share in incretin-based therapies has grown to 53.3%, showcasing the effectiveness of its commercial execution and continued prescription volume growth.
