Eli Lilly and Company’s (LLY Quick QuoteLLY - Free Report) stock has risen 16.2% since it announced robust first-quarter 2026 results on April 30. The company crushed estimates for both earnings and sales. Earnings rose 156% year over year. Total revenues rose 56% year over year to $19.8 billion, driven by robust volume growth of popular GLP-1 drugs, Mounjaro for type II diabetes and Zepbound for obesity. Lilly’s other new products also contributed significantly to sales growth. The company also raised its sales and earnings expectations for the year.

However, a single quarter’s results arenot so important for long-term investors to make an investment decision. Let’s understand the company’s strengths and weaknesses to better analyze how to play LLY’s stock in this post-Q1 earnings scenario.

Strong Growth of LLY’s GLP-1 Drugs 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 blockbuster demand for Mounjaro and Zepbound. Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Lilly, with demand rising rapidly. These therapies account for more than 60% of the company’s total revenues.

Mounjaro is the market leader in new prescriptions within type II diabetes incretin analogs in both the United States and ex-U.S. markets, while Zepbound also holds a leading market share in the branded obesity market with nearly 70% share of new prescriptions.

In the first quarter, Mounjaro recorded sales of $8.66 billion, up 125% year over year, while Zepbound’s sales were $4.16 billion, up 80% year over year, driven by increased demand, which offset the impact of lower pricing. The positive trend is expected to continue in 2026.

New Drugs Also Contributing to 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, Kisunla (donanemab) for early symptomatic Alzheimer’s disease and Inluriyo (imlunestrant) for metastatic breast cancer. These newly approved drugs are also contributing to Lilly’s revenue growth, with the positive trend expected to continue.

Lilly’s key new products (Ebglyss, Inluriyo, Jaypirca, Kisunla, Mounjaro, Omvoh, and Zepbound) contributed $13.4 billion to revenues in the first quarter. Within key products, Lilly’s Immunology, Oncology, and Neuroscience medicines collectively grew by 160% year over year in the first quarter.

Lilly’s Broad Obesity Pipeline

Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates.

In early April 2026, Lilly gained FDA approval for its once-daily oral GLP-1 pill Foundayo (orforglipron) for treating obesity. Foundayo shipments began soon after. Foundayo, which offers the benefits of GLP-1 therapy in a pill form, can prove to be a commercial game-changer for Lilly. Early launch data show that more than 8,000 healthcare providers have already prescribed Foundayo, and just over 20,000 patients have received the treatment so far, with about 80% of prescriptions coming from people new to the GLP-1 category. Lilly expects to launch Foundayo in most international markets during 2027.

Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Zepbound and Novo Nordisk’s (NVO Quick QuoteNVO - Free Report) Wegovy. Oral pills may significantly lower the treatment burden and potentially broaden patient adoption versus injections. Oral pills can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales. In addition to obesity and diabetes, Lilly is evaluating Foundayo in six phase III studies for other diabetes and obesity-related diseases.

For the type II diabetes indication, Lilly has filed regulatory applications in several countries, while it expects to file the same in the United States in late second-quarter 2026.

The company is evaluating another key candidate, triple-acting incretin, retatrutide, in type II diabetes and obesity, along with other indications like obstructive sleep apnea (OSA), knee osteoarthritis, and chronic low back pain, in late-stage studies. Retatrutide represents a new generation of “triple-action” therapy as it targets three biological pathways — GLP-1, GIP and glucagon — whereas existing medicines mostly act on one or two biological pathways.

Data from a phase III study of retatrutide in obesity and knee osteoarthritis pain showed that the drug led to significant weight loss and substantial relief of osteoarthritis pain. Data from a phase III study in type II diabetes showed that retatrutide can achieve glycemic control comparable to tirzepatide, while providingadditional weight loss.

Efforts to Diversify Beyond Obesity & Diabetes

In the past couple of years, Lilly has upped its efforts to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology and neuroscience areas. So far in 2026, it has already announced six proposed acquisitions — Centessa Pharmaceuticals, Ajax Therapeutics, Kelonia Therapeutics, Orna Therapeutics, CrossBridge Bio and Ventyx Biosciences — to expand beyond its GLP-1 franchise. These deals primarily strengthen its pipeline in oncology, neuroscience and next-generation platforms like RNA and cell therapy. In 2025, it also announced several M&A deals.

Race to Make Oral Obesity Pill Intensifies

The global obesity drug market is projected to grow dramatically, reaching nearly $95 billion by 2030 and potentially $125 billion by 2035, according to Goldman Sachs estimates.

Nordisk had gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026, which gave it a first-mover advantage over Foundayo. However, Lilly may be able to close the gap quickly now that it has launched Foundayo. Also, Foundayo offers better patient convenience as it can be taken at any time of day, with or without food. In contrast, NVO’s Wegovy pill has to be taken on an empty stomach, followed by a waiting period of 30 minutes before eating. However, in terms of side effects, Wegovy has a slight edge as it seems to have a more stable safety and tolerability profile than Foundayo, whose use is associated with some gastrointestinal side effects.

While Lilly and Novo Nordisk currently dominate this space, smaller biotechs like Structure Therapeutics (GPCR Quick QuoteGPCR - Free Report) and Viking Therapeutics (VKTX Quick QuoteVKTX - Free Report) are also developing oral GLP-1 drugs for treating obesity.

Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity.  Viking plans to advance oral VK2735 into phase III development for obesity in the fourth quarter of 2026.

Structure Therapeutics’ phase II ACCESS study on its orally GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.

LLY’s Stock Price, Valuation and Estimates

Lilly’s stock has declined 8% so far this year compared with the industry’s decrease of 3.3%.

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 27.2 forward earnings, higher than 16.72 for the industry. However, the stock is trading below its 5-year mean of 34.57.

LLY Stock Valuation

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2026 has risen from $33.50 to $34.27 per share over the past seven days, while that for 2027 has risen from $41.98 to $42.99 per share over the same timeframe.

LLY Estimate Movement

Image Source: Zacks Investment Research

Stay Invested in LLY Stock

Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States.  Price is expected to continue to be a drag on top-line growth in the low to mid-teens percentage in 2026. Rising competition in the GLP-1 diabetes/obesity market is a key headwind. Also, sales of late-life cycle products like Trulicity, Taltz and Verzenio are expected to be flat to down in 2026.

However, Lilly has one of the strongest growth profiles in big pharma. Though not cheap, Lilly is a great stock to have in one’s portfolio, given its significant price appreciation, its product and pipeline portfolio in high-growth therapeutic areas like obesity, robust growth prospects and bullish analyst sentiment. One should stay invested in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.