Eli Lilly (LLY): Blockbuster Growth, 6.34x Projected Return
5 Year Overview
Right now, Eli Lilly and Company trades at $1,208. Based on its historical financial performance, the data points to $4,242 in five years — that is 3.56x, or 28.9% CAGR. The S&P 500 is projected at 1.87x over the same period. That puts it 169% ahead of the S&P 500 over the same period.
Why 3.56x in 5 Years?
EBITDA Method
The current EBITDA is $28B and is projected to reach $205B in five years — that is 53% annual growth. Applying the sector's historical multiple of 33x EV/EBITDA gives a price target of $7,654, or 6.34x from today — ahead of the market.
Eli Lilly's gross margin has consistently expanded from 74.2% in FY2021 to 83.0% in FY2025, indicating strong pricing power and efficient cost management. This robust margin trajectory suggests the company is becoming significantly more profitable per dollar of revenue.
Free Cash Flow Method
The current free cash flow is $8.97B and is projected to reach $12B in five years — that is 53% annual growth. With an estimated FCF yield of 1.7%, this gives a price target of $830, or 0.69x from today — behind the market.
Eli Lilly has demonstrated impressive FCF growth at a 53.4% CAGR, outpacing its 30.43% revenue CAGR, indicating improved cash conversion. While capital expenditures have significantly increased, operating cash flow has grown even faster, suggesting strong underlying demand is funding reinvestment.
Blending both methods, the data points to $4,242 in five years, against today's $1,208.
Is It Still Growing?
Revenue
In FY2025, Eli Lilly and Company brought in $65B in revenue, with a 5-year CAGR of 30%.
The largest revenue year-over-year swing occurred in FY2025, with a substantial 44.7% increase. This surge was primarily driven by the rapid adoption and market expansion of key new products like Mounjaro and Zepbound, fueling significant top-line growth.
EBITDA
In FY2025, EBITDA came in at $28B, with a 5-year CAGR of 53%.
The most significant EBITDA year-over-year swing was in FY2025, with a remarkable 91.9% increase. This dramatic margin expansion was driven by strong sales growth of high-margin products and favorable operating leverage as revenue scaled rapidly.
Free Cash Flow
Free cash flow for FY2025 was $8.97B, with a 5-year CAGR of 53%.
The largest FCF year-over-year swing occurred in FY2024, with an impressive 374.7% increase. This substantial jump was primarily driven by a significant rebound in operating cash flow to $8,818,000,000, indicating strong demand and improved working capital management despite increased capital expenditures.
Growth Overview
Eli Lilly is experiencing accelerating revenue growth, with its 3-year CAGR of 39.62% surpassing the 5-year CAGR of 30.43%. Both income and free cash flow also show solid growth at 53.4% over both periods, indicating broad-based momentum. This is a compounding story still gaining significant momentum, driven by strong performance across all key financial metrics.
Financial Health
19 out of 24 checks passed.
Eli Lilly failed several key health checks, including 'Cash/Debt > 1.0', 'Debt/Equity < 80%', 'OCF > Net Income', 'CapEx / NI < 25%', and 'Payout Ratio < 1'. However, it consistently passed 'ROE > 25%' for five straight years, indicating strong profitability, but the balance sheet shows some leverage and cash flow conversion concerns.
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What Does Eli Lilly and Company Actually Do?
Top 1: Mounjaro — 34% of revenue.
Mounjaro, contributing $22,966,000,000 or 33.8% of revenue with a 111% CAGR, is a primary growth engine, solidifying Eli Lilly's leadership in the diabetes and weight loss markets.
Top 2: Zepbound — 20% of revenue.
Zepbound, at $13,542,000,000 and 19.9% of revenue with a staggering 777% CAGR, represents a rapidly expanding blockbuster drug that significantly enhances the company's competitive position in metabolic health.
Top 3: Verzenio — 8.40% of revenue.
Verzenio, generating $5,723,000,000 and 8.4% of revenue with a 22% CAGR, provides steady growth within Eli Lilly's oncology portfolio, contributing to its diversified therapeutic offerings.
Growth by Segment
All Segments by Growth (S&P 500 benchmark: 13% CAGR):
- Zepbound: 777% CAGR ✓ — Zepbound, at $13,542,000,000 and 19.9% of revenue with a staggering 777% CAGR, represents a rapidly expanding blockbuster drug that significantly enhances the company's competitive position in metabolic health.
- Mounjaro: 111% CAGR ✓ — Mounjaro, contributing $22,966,000,000 or 33.8% of revenue with a 111% CAGR, is a primary growth engine, solidifying Eli Lilly's leadership in the diabetes and weight loss markets.
- Other Immunology: 27% CAGR ✓
- Verzenio: 22% CAGR ✓ — Verzenio, generating $5,723,000,000 and 8.4% of revenue with a 22% CAGR, provides steady growth within Eli Lilly's oncology portfolio, contributing to its diversified therapeutic offerings.
- Other Oncology: 14% CAGR ✓
- Taltz: 14% CAGR ✓
- Jardiance: 12% CAGR
- Other Cardiometabolic Health: -5.1% CAGR
- Other Product, Total: -8.3% CAGR
- Collaboration and Other Revenue: -11% CAGR
- Trulicity: -23% CAGR On the other end, Trulicity is the weakest performer at -23% CAGR. Trulicity, with a -23% CAGR, is the lowest-performing segment at $4,276,000,000, likely experiencing competitive pressure and cannibalization from Eli Lilly's newer, more potent GLP-1 agonists.
Geographic Performance
Rest Of World: 43% CAGR · UNITED STATES: 41% CAGR · Europe: 37% CAGR
Valuation
So, is Eli Lilly and Company overvalued? We look at EV/EBITDA and FCF Yield.
EV/EBITDA
Eli Lilly and Company is valued at 33x EV/EBITDA. The sector's historical multiple is also 33x, making this the benchmark for our price target model.
FCF Yield
The current FCF yield is 0.8%, versus the industry average of 3.9%. Yield below peers suggests the market is pricing in stronger future growth.
Eli Lilly trades at an EV/EBITDA multiple of 33.38, which is a premium reflecting its exceptional growth prospects. The current free cash flow yield of 0.83% is significantly lower than the industry average of 3.85%, indicating that substantial future upside is already priced into the stock.
Verdict
The numbers give Eli Lilly and Company a final score of 93.8/100 — signal: BUY+
Eli Lilly and Company is projected to return 3.56x over 5 years, compared to the S&P 500's projected 1.87x over the same period.
Eli Lilly exhibits exceptional revenue and EBITDA acceleration driven by blockbuster drugs, but its valuation is at a significant premium, and some health checks indicate balance sheet leverage and cash flow conversion concerns. Despite these, the company's total return of 3.56x over five years, including $64.56 in cumulative dividend income per share, makes it suitable for growth-oriented investors willing to pay for premium innovation and market leadership.
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(Score: price projection 100/100 × 40% · growth quality 100/100 × 30% · financial health 79/100 × 30%)
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