Eli Lilly ($Eli Lilly(LLY)$) has been the talk of the town, with its stock soaring a staggering 125% in the past year. As it joins the heavyweight ranks of the S&P 500, rubbing shoulders with tech giants like Nvidia ($NVIDIA Corp(NVDA)$) and Apple ($Apple(AAPL)$), it's clear that Lilly's growth trajectory is turning heads faster than a neck brace at a tennis match.
Weighing the Pros and Cons: Financial Performance Breakdown
Eli Lilly (LLY) Stock Price Performance (2023-2024)
What's fuelling this meteoric rise, you ask? Well, imagine a world where shedding those pesky extra pounds is as easy as pie (but without the calories). Lilly's got a golden goose in the form of weight loss drugs—specifically, the glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) receptor agonists like Mounjaro and Zepbound. These drugs aren't just making people lighter; they're lifting Lilly's revenue to new heights.
Analysts expect the drugmaker's financial performance to substantially improve from the first quarter of last year, with weight-loss drugs like Eli Lilly's Zepbound and Mounjaro likely driving momentum for both the financials as well as the stock price. Similar to the optimism around Ozempic and Wegovy-maker Novo Nordisk ($Novo-Nordisk A/S(NVO)$).
Eli Lilly is expected to report a 26% year-over-year increase in revenue to $8.79 billion. Earnings likely jumped to $2.15 billion, or $2.39 a share, compared to $1.34 billion and $1.49 per share for the same period last year.
The weight-loss drugs were the biggest driver of Eli Lilly's revenue in the fourth quarter, with Mounjaro accounting for $2.21 billion, with Zepbound generating just $175.8 million in its first quarter on the market. Combined, the two weight-loss drugs made up just over a quarter of Eli Lilly's total fourth quarter revenue of $9.35 billion.
Navigating the Competitive Seas: Analyzing the Landscape
But hold your horses! With Lilly's stock skyrocketing faster than a helium balloon in a wind tunnel, you might wonder if you've missed the boat on this gravy train. Fear not, dear investor, for we shall embark on a grand odyssey through Lilly's financial seas to find our answer.
The company said it expected 2024 revenue to be "largely driven" by the New Products segment, including Zepbound. After fourth-quarter revenue jumped 28%, the company projected that its sales could increase more than 20% in 2024.
New products revenue, which includes Zepbound and Mounjaro, along with leukemia drug Jaypirca, ulcerative colitis drug Omvoh, and eczema drug Ebglyss, stood at $2.49 billion in the fourth quarter.
The Pricey Ticket: Evaluating Valuation and Risks
Let's start by peeking into Lilly's treasure chest of financial goodies. Their new and growth products are like a magic money tree, sprouting over $2.1 billion in revenue in the latest quarter alone. These aren't just one-hit wonders; they're a diverse array of drugs, ensuring Lilly's revenue ship doesn't sink if one product hits choppy patent waters.
Eli Lilly's strategic focus on weight-loss drugs has propelled its stock price, nearly doubling in the past year. The demand for these drugs has been robust, albeit leading to some challenges such as legal disputes over alleged counterfeit versions of Mounjaro.
Additionally, Eli Lilly's recent partnership with Amazon ($Amazon.com(AMZN)$) for shipping its drugs through the digital pharmacy platform may provide further insights into the company's broader digital pharmacy initiatives during the earnings call.
The Final Verdict: Investing with Confidence
And then there are the crown jewels—the weight loss wonders, Mounjaro and Zepbound. Doctors prescribing these gems for weight loss have turned them into cash cows, churning out billions in revenue faster than a smoothie blender on turbo mode. With Zepbound joining the blockbuster club and a pill-form weight loss candidate in the research pipeline, Lilly's weight loss empire might just be getting started.
Sure, Lilly's stock might seem as pricey as a Michelin-starred meal, trading at 62 times forward earnings. But remember, investing isn't just about tomorrow's brunch; it's about the feast that awaits in the years to come. With global demand for weight loss drugs on an upward trajectory, Lilly's growth story could be more riveting than a Netflix series marathon.
So, is it too late to hop on the Lilly bandwagon? Not if you're eyeing the long game. As they say, the early bird catches the worm, but the patient investor catches the elephant-sized returns. So, weigh your options (pun intended), do your due diligence, and remember, investing is a marathon, not a sprint. And with Lilly's weight loss empire flexing its muscles, there might still be room for you at the investment buffet.
Catalysing Future Health: Science in Action at Eli Lilly
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