Is LLY a good stock to buy? We came across a bullish thesis on Eli Lilly and Company on Value & Momentum Portfolio’s Substack. In this article, we will summarize the bulls’ thesis on LLY. Eli Lilly and Company’s share was trading at $987.05 as of May 6th. LLY’s trailing and forward P/E were 35.13 and 28.82 respectively according to Yahoo Finance.
Eli Lilly and Company (LLY) has transformed from a traditional pharmaceutical manufacturer into one of the fastest-growing large-cap healthcare companies globally, driven by its dominant position in obesity, diabetes, and metabolic treatments. The company’s blockbuster franchises, including Mounjaro, Zepbound, and the recently approved oral GLP-1 drug Foundayo, have fundamentally expanded Lilly’s addressable market by removing the injection barrier for millions of patients.
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Revenue has surged from $28.5 billion in FY2022 to $65.2 billion in FY2025, while quarterly growth consistently exceeded 40%, highlighting the extraordinary scale of demand for tirzepatide-based therapies. Lilly’s aggressive reinvestment strategy further strengthens its competitive position, with roughly 25% of revenue allocated toward R&D and more than $55 billion committed to manufacturing expansion since 2020, creating a substantial moat that smaller competitors cannot replicate.
Financial performance has accelerated sharply alongside this scale, with operating margins expanding from below 30% in early 2024 to over 46% by late 2025, while free cash flow increased to $21 billion annually as the company exited its heavy investment phase. Lilly is also diversifying beyond obesity through neuroscience, oncology, and Alzheimer’s therapies, supported by acquisitions such as Centessa Pharmaceuticals and continued expansion of Kisunla and Jaypirca.
Despite trading below its recent highs, valuation multiples have compressed significantly as earnings growth outpaced share appreciation. With 2026 revenue guidance approaching $83 billion and Wall Street price targets largely between $1,250 and $1,350, Lilly remains positioned as a rare large-scale healthcare compounder with substantial long-term upside potential.
Previously, we covered a bullish thesis on Eli Lilly and Company (LLY) by Kontra in May 2025, which highlighted Lilly’s dominance in obesity and diabetes treatments through Mounjaro, Zepbound, and its expanding GLP-1 pipeline. LLY’s stock price has appreciated by approximately 24.29% since our coverage. Value & Momentum Portfolio shares a similar view but emphasizes on Foundayo’s market-expanding potential and Lilly’s accelerating free cash flow and margin profile.
Eli Lilly and Company is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 137 hedge fund portfolios held LLY at the end of the fourth quarter which was 114 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 time frame. If you are looking for an AI stock that is more promising than LLY and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
