Why Eli Lilly Still Has Room to Run — Even After Its Latest Rally
When Eli Lilly (NYSE: LLY) reported first-quarter earnings on April 30, the market reacted with a nearly 10% pop. But here’s the twist: the stock is still down roughly 10% year-to-date. For investors sitting on the sidelines, that might actually be an opportunity — not a warning sign.
Let’s break down why the pharma giant still has plenty of fuel left in the tank.
1. Revenue and Earnings Are Still on Fire
Lilly posted Q1 revenue of $19.8 billion, up 56% year over year. That kind of top-line growth is almost unheard of for a company of its size. Earnings per share hit $8.55 (adjusted), a 156% jump from the same quarter last year. The main drivers? Mounjaro and Zepbound — the company’s blockbuster GLP-1 drugs for diabetes and obesity. Mounjaro sales surged 125% to $8.7 billion, while Zepbound brought in $4.2 billion, up 80% from Q1 2025.
“These numbers are absurd for a big pharma,” says Mark Delaney, a healthcare analyst at a Boston-based investment firm. “Most companies would kill for 10% growth. Lilly’s doing 56% and still getting punished by the market. That’s just noise.”
2. A New Oral GLP-1 Could Expand the Market
In early April, Lilly won FDA approval for Foundayo, an oral GLP-1 medicine for weight loss. Management noted that 80% of patients starting Foundayo are new to GLP-1 therapies — many of whom previously avoided injections or couldn’t afford monthly costs. That suggests the drug is tapping into a fresh pool of demand, not just cannibalizing existing sales.
“Finally, a pill that actually works for weight loss without the needle phobia,” says Sarah Kim, a 34-year-old patient from Austin, Texas, who started Foundayo last month. “I tried injections once and couldn’t do it. This changes everything for people like me.”
Meanwhile, the FDA has proposed removing tirzepatide (the active ingredient in Mounjaro and Zepbound) from its list of drugs eligible for compounding. If finalized, that would crack down on cheaper compounded versions that have been eating into Lilly’s pricing power. For a company that’s been fighting a losing battle against telehealth upstarts, this could be a major tailwind.
“It’s about time the FDA stepped in,” says James Porter, a former pharmaceutical executive turned investor. “These compounding pharmacies have been operating in a gray area for years. If this goes through, Lilly gets back its pricing leverage — and that’s huge for margins.”
3. Beyond GLP-1s, the Pipeline Is Stacked
Lilly isn’t just a one-trick pony. In Q1, its cancer drug Jaypirca saw sales jump 79% to $165 million. Ebglyss (eczema), Kisunla (Alzheimer’s), and Omvoh (ulcerative colitis) all more than doubled their revenue. While these are still small relative to the GLP-1 juggernaut, analysts expect each to eventually cross the $1 billion annual sales mark.
“People forget that Lilly has a deep pipeline beyond weight loss,” says Dr. Elena Rossi, a biotech analyst at a New York hedge fund. “The Alzheimer’s data alone is promising. If Kisunla gets broader adoption, that’s another multi-billion-dollar franchise in the making.”
Lilly’s shares aren’t cheap — trading at 28.5 times forward earnings versus the healthcare sector average of 16.5. But with growth rates like these, the premium is justified. For investors with a five-year horizon, the current dip could look like a gift in hindsight.
“I’m not saying buy blindly,” adds Porter. “But if you’re waiting for a 10% discount on a stock that’s growing revenue at 56%, you might be waiting forever.”
Prosper Junior Bakiny has positions in Eli Lilly. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.