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.
Looking ahead, several near-term catalysts support a bullish outlook. These include the expected regulatory submissions and approvals for orforglipron, the rollout of higher-dose tirzepatide for broader indications like heart failure, and key Phase 3 cardiovascular outcomes data. Lilly has reiterated its full-year 2025 revenue guidance of $58.0 to $61.0 billion, highlighting management’s confidence in the durability of its growth. Although pricing pressures and competitive shifts could pose risks, particularly from formulary changes, Lilly’s capacity expansion plans and strong balance sheet mitigate these concerns. Importantly, the long-term thesis remains intact: Eli Lilly and Novo Nordisk are likely to command 70–80% of the global obesity market for the foreseeable future, meaning the rising tide in obesity care is big enough for both to thrive. With unmatched innovation, financial strength, and strategic execution, Eli Lilly represents a compelling opportunity for investors seeking long-term exposure to one of the most transformative shifts in global healthcare. The company is set to deliver sustainable earnings and free cash flow growth for years to come.
Eli Lilly and Company (LLY) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 115 hedge fund portfolios held LLY at the end of the fourth quarter which was 106 in the previous quarter. While we acknowledge the risk and potential of LLY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
