Eli Lilly and Co (LLY) stock analysis
Eli Lilly and Co (LLY) clears 3 of this site's 8 mechanical value filters, 5 of 8 Buffett-style checks and 0 of 5 Lynch-style checks. At $1306.69 it trades 425.6% above this site's neutral DCF value (a margin of safety of -425.6%). Its earnings quality rates Mixed and it returns +0.7% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Eli Lilly do?
Eli Lilly develops and sells prescription drugs. It is now best known for its diabetes and weight-loss medicines, Mounjaro and Zepbound, and also sells cancer, immunology and Alzheimer's treatments.
Brands and businesses it owns
- Mounjaro
- Zepbound
- Trulicity
- Verzenio
- Taltz
- Humalog
- Kisunla
What stands out about Eli Lilly?
- The share price implies more than 40% yearly growth. At $1306.69, free cash flow per share would have to grow faster than 40% a year, fading to 2.5% by year 10, for this site's DCF to match the price. Change the assumptions.
- Misses 3 of the 8 value filters. It fails Trailing P/E < 25 (45.56), Price/Book < 8 (35.92) and Price/Sales < 7 (15.28); the other 3 pass and 2 were not evaluated. See every filter.
- The margin of safety is falling. It went from -374% on Oct 7 to -426% on Oct 23 across 5 weekly readings. See the trend.
- Strongest against peers: revenue growth. At 49.6% (peer median 5.5%) it ranks 1st of 15 among pharma & biotech stocks this site tracks. See the ranking.
- Weakest against peers: free-cash-flow yield. At 1.1% (peer median 4.5%) it ranks 15th of 15 among pharma & biotech stocks this site tracks. See the ranking.
How has Eli Lilly's share price moved?
The interactive price chart needs JavaScript.
Is Eli Lilly undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -425.6%
- P/E vs. its own history 45.6x · near the cheap end Real range: 45.1x–100.5x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 4.14/5 36 analysts this month: 11 strong buy, 20 buy, 4 hold, 1 sell, 0 strong sell (Finnhub). Up from 4.05 last month.
- Earnings quality (is the profit real?) Mixed · 2 watch Beneish M-score −1.85 (grey zone), mostly from very fast sales growth · accruals 4.0% of assets · 82% of profit arrived as cash · stock comp 1.0% of revenue · share count −0.2% a year. From the latest 10-K (year to Dec 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +0.7% net Latest fiscal year (2025): dividends 0.4% + buybacks 0.3% − stock comp 0.1%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 19%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $1.83 per $1 of new profit · FlightSafety-like Operating profit $3.3B → $16B, capital needed $16B → $38B, 2016–2025 (3-year averages); return on capital now 41% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 1.34 · Above fair P/E 45.6× ÷ 33.9% a year of growth behind it. 142nd lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 3 of 4 · misses cash back Capital-light growth: cleared; Profit is real: cleared; Cash to owners: not cleared (+0.5% a year net); Fair price (PEG): cleared. See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 4 flags
- Standing vs. sector peers 3 of 7 measures above the median Compared with the 14 other pharma & biotech stocks this site tracks: 3 in the top third, 3 in the bottom third.
- Dividend payout sustainability 0/6 · clean
How does Eli Lilly compare with its peers?
3 of 7 measures sit above the median of the 14 other pharma & biotech stocks tracked here, 3 in the top third and 3 in the bottom third.
- P/E ratiolower is cheaper · peer median 35.0× 45.6× ✕10th of 12
- Free-cash-flow yieldhigher is cheaper · peer median 4.5% 1.1% ✕15th of 15
- Return on equityhigher is better · peer median 23% 93% ✓2nd of 15
- Net marginhigher is better · peer median 16.2% 33.5% ✓2nd of 15
- Revenue growthhigher is better, year on year · peer median 5.5% 49.6% ✓1st of 15
- Debt / equitylower is safer · peer median 0.94 1.62 –10th of 15
- Dividend yieldamong dividend payers · peer median 2.38% 0.48% ✕10th of 11
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and LLY doesn't clear enough of it yet. In its favor: LLY is currently earning a strong return on shareholders' equity, and has kept that profitability up over five years, not just this year, converts sales into profit at healthy margins, has grown earnings per share at a solid clip over five years, and earns many times its interest expense, so debt service isn't a worry. Where it comes up short: LLY carries more debt relative to equity than he typically tolerates, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✓
- EPS growth (5yr) > 7% ✓
- Interest coverage > 5x ✓
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
- Bonus: returning capital via buybacks FY2025
Lynch looked for growth stories that weren't overpriced for that growth, and LLY falls short of his bar. Where it comes up short: LLY doesn't clear the tighter PEG bar a fast grower needs to justify its pace, is growing earnings outside the 20-50% band he considered sustainable for a fast grower - either not fast enough to earn the label, or a pace he'd flag as unlikely to hold up, is leaning on more debt than he liked a growth story to carry, is priced above what he'd pay even for a company growing this quickly, and isn't generating enough free cash flow to justify a fast grower's richer price.
- PEG < 1 (stricter for fast growers) ✕
- EPS growth 20%-50% ✕
- Debt/Equity < 0.5 ✕
- P/E < 40 ✕
- Price/FCF < 40 ✕
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Eli Lilly pass?
- Market Cap > $25B $1.22T
- Trailing P/E < 25 45.56
- PEG Ratio < 1.5 1.34
- Price/Book < 8 35.92
- Price/Sales < 7 15.28
- EPS Growth YoY > -5% +26.2%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Eli Lilly's margin of safety?
-374% on 2026-10-07 → -426% on 2026-10-23 (5 weekly readings).
Where is Eli Lilly in its 52-week range?
What is the short interest in Eli Lilly?
7,035,434 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Eli Lilly? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case -211%
- Short interest under 5% of float 0.8%
- Passes most of the 6 fundamental filters 3/6 passed
- Price run-up backed by value, not just momentum +64% off 52wk low
- Debt/equity stable since 2016 0.74 → 1.60
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Eli Lilly shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from LLY's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Eli Lilly's 10-year financials show?
From LLY's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
A single trade isn't automatically bullish or bearish. Insiders sell for all kinds of personal reasons. Most recent filings for LLY:
Frequently asked questions about Eli Lilly
What kind of company is Eli Lilly?
Eli Lilly develops and sells prescription drugs. It is now best known for its diabetes and weight-loss medicines, Mounjaro and Zepbound, and also sells cancer, immunology and Alzheimer's treatments. Brands and businesses it owns include Mounjaro, Zepbound, Trulicity, Verzenio, Taltz and Humalog. This site groups it with Pharmaceuticals stocks.
Is Eli Lilly trading above or below its DCF value?
At $1306.69, LLY trades 425.6% above this site's neutral DCF value of $248.62 per share, a margin of safety of −425.6%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Eli Lilly pass?
LLY passes 3 of 8. It passes Market Cap > $25B ($1.22T), PEG Ratio < 1.5 (1.34) and EPS Growth YoY > -5% (+26.2%). It misses Trailing P/E < 25 (45.56), Price/Book < 8 (35.92) and Price/Sales < 7 (15.28). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
Are Eli Lilly's reported earnings reliable?
This site's earnings-quality check rates LLY Mixed · 2 watch. Beneish M-score −1.85 (grey zone), mostly from very fast sales growth · accruals 4.0% of assets · 82% of profit arrived as cash · stock comp 1.0% of revenue · share count −0.2% a year. From the latest 10-K (year to Dec 2025). Concerns: the Beneish M-score (on watch) and cash conversion (on watch). The five checks are the Beneish M-score (manipulation risk), accruals, cash conversion, stock-based compensation and share dilution; the Earnings Quality Screener shows how each is graded.
Where is Eli Lilly trading compared with its 52-week range?
At $1306.69, LLY trades 63.8% above its 52-week low of $799.57 and 0.2% below its 52-week high of $1,309.53.
When does Eli Lilly report earnings next?
Eli Lilly's next earnings report is expected on October 29, 2026 before the market opens, with analysts expecting earnings of $7.01 per share. Dates come from the Finnhub earnings calendar and can move. In its last 4 quarters it beat the estimate 4 times, by an average of +24.8%.
Where do these numbers come from?
- Financial statements: Eli Lilly's 10-K annual report for the year ended Dec 31, 2025, filed Feb 12, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Eli Lilly and Co analysis
This page shows every value-investing check the site runs on Eli Lilly and Co (LLY) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.