Eli Lilly and CompanyLLY
NYQ • Healthcare
$1251.61
P/E
41.88
PEG
1.66
FCF Yield
0.5%
Rev Growth YoY
+47.7% YoY
Gross Margin
85.8%
Health Score
8/10
D/E Ratio
1.62
Confidence
MEDIUM
Business Snapshot
Eli Lilly and Company is a pharmaceutical giant whose revenue is driven by branded prescription medicines across cardiometabolic health, oncology, immunology, and neuroscience, with its GLP-1 franchise anchoring the cardiometabolic segment. It operates in the global branded pharmaceuticals market, where it ranks among the largest players by revenue and competes directly with other multinational drugmakers on innovation, patent protection, and manufacturing scale. At a market capitalisation of $1.12 trillion, it sits firmly in large-cap territory, with trailing twelve-month revenue of $79.67 billion and net income of $26.71 billion. The defining characteristic of the business is its intellectual property moat: patented molecules and a deep pipeline create pricing power and multi-year revenue visibility that generic manufacturers cannot easily replicate. Its 85.8% gross margin underscores the economics of that model — the cost of producing a pill is trivial relative to what the market pays for it.
Financial Health
Gross margin stands at 85.8%, up from 81.9% in the prior year, while net margin (TTM) is 33.5% — a combination that reflects both pricing power and improving operating efficiency. The balance sheet is moderately leveraged, with debt/equity of 1.62x and a current ratio of 1.35x, which is manageable for a company of this scale but not fortress-like...
Risk Assessment
- VALUATION — P/E of 41.88x is 65% above the sector average of 25.4x, leaving little room for earnings disappointment.
- EARNINGS QUALITY — 4 out of 4 recent quarters beat estimates, which is a positive signal, but the streak raises the bar for future guidance.
- REVENUE DECELERATION — QoQ growth of 16.0% is well below YoY growth of 47.7%, indicating the sequential pace is slower than the annual comparison suggests.
- DEBT / LIQUIDITY — Debt/equity of 1.62x is above 1.5x, and the current ratio of 1.35x provides adequate but not abundant short-term liquidity.
- 52-WEEK POSITION — The current price of $1,251.61 is near the 52-week high of $1,292.65, just 3.2% below it, while the 52-week low is $783.85.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- FCF / CASH BURN — Free cash flow of $5.96 billion translates to an FCF yield of just 0.5%, well below 1%, meaning the company generates minimal cash relative to its market value....
Gross margin stands at 85.8%, up from 81.9% in the prior year, while net margin (TTM) is 33.5% — a combination that reflects both pricing power and improving operating efficiency. The balance sheet is moderately leveraged, with debt/equity of 1.62x and a current ratio of 1.35x, which is manageable for a company of this scale but not fortress-like. Free cash flow of $5.96 billion is positive, though the FCF yield of just 0.5% is thin relative to the $1.12 trillion market cap — the company is generating cash, but the market is pricing in enormous future growth rather than current cash returns. Return on equity of 102.3% is exceptionally high, though this is partly a function of leverage and share buybacks rather than purely operational efficiency. Overall, the financial position is strong enough to fund reinvestment and sustain the dividend, but the low FCF yield means investors are paying a steep price for each dollar of current cash generation.
- VALUATION — P/E of 41.88x is 65% above the sector average of 25.4x, leaving little room for earnings disappointment. - EARNINGS QUALITY — 4 out of 4 recent quarters beat estimates, which is a positive signal, but the streak raises the bar for future guidance. - REVENUE DECELERATION — QoQ growth of 16.0% is well below YoY growth of 47.7%, indicating the sequential pace is slower than the annual comparison suggests. - DEBT / LIQUIDITY — Debt/equity of 1.62x is above 1.5x, and the current ratio of 1.35x provides adequate but not abundant short-term liquidity. - 52-WEEK POSITION — The current price of $1,251.61 is near the 52-week high of $1,292.65, just 3.2% below it, while the 52-week low is $783.85. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - FCF / CASH BURN — Free cash flow of $5.96 billion translates to an FCF yield of just 0.5%, well below 1%, meaning the company generates minimal cash relative to its market value.
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