Eli Lilly (LLY) Valuation and Fundamentals

Eli Lilly reported USD figures for the year ended December 31, 2025, with revenue of about 65,179,000,000 and net income of about 20,640,000,000. Revenue grew 44.70% year over year, showing strong top-line momentum from the prior period.

Profitability remained exceptional, with a gross margin of 83.04%, operating margin of 40.35%, and net profit margin of 31.66%. These levels indicate a highly efficient business model capable of converting a large portion of revenue into profit.

The balance sheet shows cash of about 7,268,000,000 and total debt of about 3,270,000,000, suggesting a conservative financial position. However, CapEx and free cash flow data are not provided, limiting visibility into cash generation after investment spending.

With a trailing P/E of 48.09 and ROE of 97.85%, the company demonstrates strong profitability but trades at a premium valuation that reflects high expectations for continued growth and margin stability.

At a current price of 1,051.99 USD, the stock trades within the model’s fair value range and below its central estimate, indicating that the valuation appears reasonable relative to the DCF framework.

The market is already pricing in sustained high profitability and continued growth from a large base, as reflected in the 48.09x earnings multiple and 15.23x sales multiple. These levels imply that investors expect the company to maintain its strong margins and growth trajectory.

If growth or margins weaken, the valuation could compress given the high multiples. Conversely, maintaining current profitability and growth rates would justify the present price within the model’s fair value range.