Eli Lilly and Company (LLY)
Valuation Overview•Is Eli Lilly and Company Overvalued or Undervalued?
Commands a premium valuation multiple over its peers, likely pricing in superior execution.
High-quality fundamentals with a strong composite quality score of 88/100, backed by robust profitability and solvency.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: High-quality compounder, with solvency as the only relative weakness.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
LLY exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins (highlighted by a massive 41.8% ROIC). This is paired with a moderately leveraged but stable balance sheet.
The company is driving exceptional top-line expansion (31.7% 3Y CAGR) paired with highly explosive earnings growth (51.7% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 45.9% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $19.8B | +44.7% | +31.7% | +21.6% | +12.6% | |
| EBITDA | $9.4B | — | +45.4% | — | — | |
| Net Income | $7.4B | +94.9% | +49.0% | — | +24.0% | |
| EPS (Diluted) | $8.26 | +96.0% | +51.7% | +28.8% | +26.5% | |
| Free Cash Flow | $3.0B | +2065.6% | +24.9% | +14.9% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 83.5% | 81.4% | 79.1% | 78.1% |
| Operating Margin | 45.9% | 38.7% | 34.9% | 29.8% |
| Net Margin | 35.0% | 23.5% | 22.4% | 20.2% |
| FCF Margin | 18.8% | 1.8% | 8.1% | 12.1% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $6.97 | $8.55 | +22.7% | ||
| Q1'26 | $6.91 | $7.54 | +9.1% | ||
| Q4'25 | $5.69 | $7.02 | +23.4% | ||
| Q3'25 | $5.60 | $6.31 | +12.7% | ||
| Q2'25 | $3.26 | $3.34 | +2.5% | ||
| Q1'25 | $5.03 | $5.32 | +5.8% | ||
| Q4'24 | $1.47 | $1.18 | -19.7% | ||
| Q3'24 | $2.60 | $3.92 | +50.8% |
Total return is +40.7% (1Y), outperforming the benchmark by +15.7%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +2.0% | -7.3% | — |
| 1Y | +40.7% | +15.7% | +0.8% |
| 3YCAGR | +35.1% | +16.1% | +3.7% |
| 5YCAGR | +38.7% | +26.1% | +11.3% |
| 10YCAGR | +31.5% | +17.9% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Eli Lilly and Company (LLY) valuation, health, and returns.
Eli Lilly and Company is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. trading near fair value (DCF: $1012.15)
Eli Lilly and Company has multiple valuation anchors: DCF Intrinsic Value: $1012.15 | Peer Relative Fair Value: $464.58 | Wall Street Analyst Target: $1271.24 (implying +15.8% upside). A convergence of these signals offers higher conviction.
Eli Lilly and Company displays excellent financial health with a composite quality score of 88/100, supported by a Altman Z-Score of 8.7 (safe zone), Piotroski F-Score of 8/9, Return on Invested Capital (ROIC) of 41.8%.
Eli Lilly and Company pays a 0.5% dividend yield, covered by a 26% payout ratio with 11 years of growth, supplemented by a 0.4% buyback yield.
Eli Lilly and Company's current growth trajectory is Accelerating. The company achieved +44.7% 1Y revenue growth and +96.0% 1Y EPS growth, compared to its 3Y revenue CAGR of +31.7%.
Wall Street consensus is Buy based on 45 analysts, beating EPS expectations in 92% of recent quarters with a 6-quarter streak. The consensus price target represents a +15.8% change from current levels.
Investment risks for Eli Lilly and Company include: -23.3% 1-year max drawdown. Volatility risk is characterized by a beta of 0.51x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.