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Lilly Down More Than 15% in a Year: Time to Buy, Sell or Hold?
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Key Takeaways
LLY stock is down 15.7% in a year due to earnings miss, guidance cut and Novo Nordisk's rising momentum.
Mounjaro and Zepbound now drive 48% of LLY's revenues, fueled by global launches and improving supply.
LLY expects 2025 revenues of $58B to $61B, backed by new drugs.
Eli Lilly and Company’s (LLY - Free Report) stock has declined 15.7% in the past year. The first-quarter earnings miss, guidance cut and some positive developments at rival Novo Nordisk (NVO - Free Report) were the primary reasons for the dip. The uncertainty around tariffs and trade production measures, along with escalating geopolitical tensions in various parts of the world, has muted economic growth, hurting stock prices at large. LLY’s price decline in the past year has left investors wondering if they should consider selling the stock.
Let’s understand the company’s strengths and weaknesses to better analyze how to play the stock amid the recent price decline.
LLY’s Top Line Thrives on Strong Growth of Mounjaro and Zepbound
Lilly boasts a robust portfolio of treatments for diabetes and other cardiometabolic conditions, with its cardiometabolic division emerging as the company’s strongest segment. This success is largely attributed to its widely used GLP-1 therapies — Mounjaro for diabetes and Zepbound for weight loss.
Despite being on the market for less than three years, GLP-1 medicines, Mounjaro and Zepbound, became key top-line drivers for Lilly, with demand rising rapidly. Mounjaro and Zepbound account for around 48% of the company’s total revenues.
Though sales of Mounjaro and Zepbound were below expectations in the second half of 2024, hurt by slower-than-expected growth and unfavorable channel dynamics, their sales picked up in the first quarter of 2025, driven by launches of the drugs in new international markets and improved supply from ramped-up production. Both medicines continue to gain share in the U.S. market.
LLY’s Efforts to Drive Mounjaro & Zepbound Sales
We anticipate that expanding uptake in international markets, along with deeper market penetration in the United States, will continue to fuel growth for Mounjaro and Zepbound in the coming quarters.
Mounjaro was recently launched in China, and Lilly expects to increase commercial launches in the country in the second half of 2025 as supply improves. Lilly also launched Mounjaro in India and Mexico recently and plans to continue with additional country launches throughout 2025.
Regulatory approvals for new indications are expected to further boost sales. In late December, the FDA approved Zepbound for a second indication — moderate-to-severe obstructive sleep apnea in adults with obesity. Additionally, Lilly plans to release results from a cardiovascular outcomes trial for tirzepatide this year. The ApPhase II study in metabolic dysfunction-associated steatohepatitis (MASH) also achieved its primary endpoint in 2024.
In 2025, Lilly launched additional Zepbound lower-priced vial doses and offered new savings for self-pay patients to boost sales.
New Drugs and Advancing Pipeline Poised to Drive LLY’s Growth
In addition to Mounjaro and Zepbound, Lilly has secured approvals for several other new therapies over the past few years. These include Omvoh for treating ulcerative colitis and Crohn’s disease, BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia, Ebglyss for moderate-to-severe atopic dermatitis, and Kisunla (donanemab) for early symptomatic Alzheimer’s disease. These newly approved drugs are also contributing to Lilly’s revenue growth.
Lilly expects its new drugs, Mounjaro, Zepbound, Omvoh, Jaypirca, Ebglyss and Kisunla, along with the expanded use of existing drugs, to drive sales growth in 2025. It also expects the potential launch of new medicines like imlunestrant for metastatic breast cancer to contribute to growth in 2025.
The company is also making rapid pipeline progress in obesity, diabetes and cancer, with several key mid and late-stage data-readouts expected this year.
Lilly is investing broadly in obesity and has several next-gen candidates currently in clinical development, including key late-stage candidates, orforglipron, an oral GLP-1 small molecule, and retatrutide, a GGG tri-agonist.
LLY is also working to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas. In 2025, it has already announced three M&A deals. It is acquiring Verve Therapeutics, which will add gene therapies for heart disease to its pipeline. Prior to the VERV deal, Lilly announced that it had entered into agreements to acquire Scorpion Therapeutics’ oncology drug and SiteOne Therapeutics’ non-opioid pain candidate.
Competition Heating Up in the Obesity Space
The obesity market is expected to expand to $100 billion by 2030, according to data from Goldman Sachs, which means fierce competition is inevitable. Lilly and Novo Nordisk presently dominate the market.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s semaglutide medicines, Ozempic for diabetes and Wegovy for obesity. Novo Nordisk has already filed an application for an oral version of Wegovy and also has several next-generation candidates in its obesity pipeline, like CagriSema and amycretin.
However, Lilly’s GLP-1 products have shown better results in clinical studies. In an earlier head-to-head study, LLY’s Zepbound has shown superior weight loss than NVO’s Wegovy.
Several companies like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are also making rapid progress in the development of more potent and convenient GLP-1-based candidates in their clinical pipeline.
Amgen has initiated a broad phase III program on its dual GIPR/GLP-1 receptor agonist, MariTide, across obesity, obesity-related conditions and type II diabetes. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Phase III obesity studies with the subcutaneous formulation of VK2735 were recently initiated.
AMGN and VKTX’s products can pose strong competition to Mounjaro/Zepbound and NVO’s Ozempic/Wegovy in the future.
Others like Roche, Merck and AbbVie are also looking to enter the obesity space by in-licensing obesity candidates from smaller biotechs, which could threaten Novo Nordisk and Eli Lilly’s dominance in the market.
LLY’s Other Headwinds
Lilly is battling several challenges at present. Sales of its key medicine, Trulicity, are declining in the United States due to competitive dynamics, including Mounjaro switches and supply constraints. Prices of most of Lilly’s products are declining in the United States, including Mounjaro and Zepbound, primarily due to changes to estimates for rebates and discounts. Lilly’s U.S. net price has declined every year since 2021. In 2025, Lilly expects a mid-to-high single-digit percentage price decline, including U.S. Part D changes. Rapid progress in the development of competing therapies in the GLP-1 market has also hurt the stock price.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has risen 2.3% so far this year compared with the industry’s increase of 0.8%.
LLY Stock Outperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 29.54 forward earnings, higher than 15.04 for the industry. However, the stock is trading below its 5-year mean of 34.54.
LLY Stock Valuation
Image Source: Zacks Investment Research
Estimates for Lilly’s 2025 earnings have declined from $22.20 to $21.94 per share in the past 60 days, while those for 2026 have risen from $30.83 to $30.88 over the same timeframe.
LLY Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in LLY Stock
Lilly’s tremendous success with Mounjaro and Zepbound has made it the largest drugmaker with a market cap of more than $730 billion, and its stock price has crossed $750 per share. Lilly’s stock has shot up more than 400% in the past five years, mainly due to its successful new drug launches, particularly Mounjaro and Zepbound, and its solid pipeline potential.
However, lower-than-expected sales numbers and concerns about potential competition in the GLP-1 market have been weighing on the stock this year.
Nonetheless, in 2025, Lilly expects to record revenues in the range of $58.0 billion to $61.0 billion, indicating an impressive 32% year-over-year growth.
Image: Bigstock
Lilly Down More Than 15% in a Year: Time to Buy, Sell or Hold?
Key Takeaways
Eli Lilly and Company’s (LLY - Free Report) stock has declined 15.7% in the past year. The first-quarter earnings miss, guidance cut and some positive developments at rival Novo Nordisk (NVO - Free Report) were the primary reasons for the dip. The uncertainty around tariffs and trade production measures, along with escalating geopolitical tensions in various parts of the world, has muted economic growth, hurting stock prices at large. LLY’s price decline in the past year has left investors wondering if they should consider selling the stock.
Let’s understand the company’s strengths and weaknesses to better analyze how to play the stock amid the recent price decline.
LLY’s Top Line Thrives on Strong Growth of Mounjaro and Zepbound
Lilly boasts a robust portfolio of treatments for diabetes and other cardiometabolic conditions, with its cardiometabolic division emerging as the company’s strongest segment. This success is largely attributed to its widely used GLP-1 therapies — Mounjaro for diabetes and Zepbound for weight loss.
Despite being on the market for less than three years, GLP-1 medicines, Mounjaro and Zepbound, became key top-line drivers for Lilly, with demand rising rapidly. Mounjaro and Zepbound account for around 48% of the company’s total revenues.
Though sales of Mounjaro and Zepbound were below expectations in the second half of 2024, hurt by slower-than-expected growth and unfavorable channel dynamics, their sales picked up in the first quarter of 2025, driven by launches of the drugs in new international markets and improved supply from ramped-up production. Both medicines continue to gain share in the U.S. market.
LLY’s Efforts to Drive Mounjaro & Zepbound Sales
We anticipate that expanding uptake in international markets, along with deeper market penetration in the United States, will continue to fuel growth for Mounjaro and Zepbound in the coming quarters.
Mounjaro was recently launched in China, and Lilly expects to increase commercial launches in the country in the second half of 2025 as supply improves. Lilly also launched Mounjaro in India and Mexico recently and plans to continue with additional country launches throughout 2025.
Regulatory approvals for new indications are expected to further boost sales. In late December, the FDA approved Zepbound for a second indication — moderate-to-severe obstructive sleep apnea in adults with obesity. Additionally, Lilly plans to release results from a cardiovascular outcomes trial for tirzepatide this year. The ApPhase II study in metabolic dysfunction-associated steatohepatitis (MASH) also achieved its primary endpoint in 2024.
In 2025, Lilly launched additional Zepbound lower-priced vial doses and offered new savings for self-pay patients to boost sales.
New Drugs and Advancing Pipeline Poised to Drive LLY’s Growth
In addition to Mounjaro and Zepbound, Lilly has secured approvals for several other new therapies over the past few years. These include Omvoh for treating ulcerative colitis and Crohn’s disease, BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia, Ebglyss for moderate-to-severe atopic dermatitis, and Kisunla (donanemab) for early symptomatic Alzheimer’s disease. These newly approved drugs are also contributing to Lilly’s revenue growth.
Lilly expects its new drugs, Mounjaro, Zepbound, Omvoh, Jaypirca, Ebglyss and Kisunla, along with the expanded use of existing drugs, to drive sales growth in 2025. It also expects the potential launch of new medicines like imlunestrant for metastatic breast cancer to contribute to growth in 2025.
The company is also making rapid pipeline progress in obesity, diabetes and cancer, with several key mid and late-stage data-readouts expected this year.
Lilly is investing broadly in obesity and has several next-gen candidates currently in clinical development, including key late-stage candidates, orforglipron, an oral GLP-1 small molecule, and retatrutide, a GGG tri-agonist.
LLY is also working to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas. In 2025, it has already announced three M&A deals. It is acquiring Verve Therapeutics, which will add gene therapies for heart disease to its pipeline. Prior to the VERV deal, Lilly announced that it had entered into agreements to acquire Scorpion Therapeutics’ oncology drug and SiteOne Therapeutics’ non-opioid pain candidate.
Competition Heating Up in the Obesity Space
The obesity market is expected to expand to $100 billion by 2030, according to data from Goldman Sachs, which means fierce competition is inevitable. Lilly and Novo Nordisk presently dominate the market.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s semaglutide medicines, Ozempic for diabetes and Wegovy for obesity. Novo Nordisk has already filed an application for an oral version of Wegovy and also has several next-generation candidates in its obesity pipeline, like CagriSema and amycretin.
However, Lilly’s GLP-1 products have shown better results in clinical studies. In an earlier head-to-head study, LLY’s Zepbound has shown superior weight loss than NVO’s Wegovy.
Several companies like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are also making rapid progress in the development of more potent and convenient GLP-1-based candidates in their clinical pipeline.
Amgen has initiated a broad phase III program on its dual GIPR/GLP-1 receptor agonist, MariTide, across obesity, obesity-related conditions and type II diabetes. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Phase III obesity studies with the subcutaneous formulation of VK2735 were recently initiated.
AMGN and VKTX’s products can pose strong competition to Mounjaro/Zepbound and NVO’s Ozempic/Wegovy in the future.
Others like Roche, Merck and AbbVie are also looking to enter the obesity space by in-licensing obesity candidates from smaller biotechs, which could threaten Novo Nordisk and Eli Lilly’s dominance in the market.
LLY’s Other Headwinds
Lilly is battling several challenges at present. Sales of its key medicine, Trulicity, are declining in the United States due to competitive dynamics, including Mounjaro switches and supply constraints. Prices of most of Lilly’s products are declining in the United States, including Mounjaro and Zepbound, primarily due to changes to estimates for rebates and discounts. Lilly’s U.S. net price has declined every year since 2021. In 2025, Lilly expects a mid-to-high single-digit percentage price decline, including U.S. Part D changes. Rapid progress in the development of competing therapies in the GLP-1 market has also hurt the stock price.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has risen 2.3% so far this year compared with the industry’s increase of 0.8%.
LLY Stock Outperforms Industry
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 29.54 forward earnings, higher than 15.04 for the industry. However, the stock is trading below its 5-year mean of 34.54.
LLY Stock Valuation
Estimates for Lilly’s 2025 earnings have declined from $22.20 to $21.94 per share in the past 60 days, while those for 2026 have risen from $30.83 to $30.88 over the same timeframe.
LLY Estimate Movement
Stay Invested in LLY Stock
Lilly’s tremendous success with Mounjaro and Zepbound has made it the largest drugmaker with a market cap of more than $730 billion, and its stock price has crossed $750 per share. Lilly’s stock has shot up more than 400% in the past five years, mainly due to its successful new drug launches, particularly Mounjaro and Zepbound, and its solid pipeline potential.
However, lower-than-expected sales numbers and concerns about potential competition in the GLP-1 market have been weighing on the stock this year.
Nonetheless, in 2025, Lilly expects to record revenues in the range of $58.0 billion to $61.0 billion, indicating an impressive 32% year-over-year growth.
Despite an expensive valuation, we suggest investors who own this Zacks Rank #3 (Hold) company retain it as it has solid growth prospects despite some near-term headwinds. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.