Eli Lilly Stock Outpaces Earnings Growth: A Closer Look

Eli Lilly and Company (NYSE: LLY) has seen its stock performance outpace its earnings growth over the past five years. The company's shares have risen by 63.22% year-to-date, while its earnings per share (EPS) have grown by 102% in the fourth quarter of 2024 compared to the same period in 2023. This article explores the factors contributing to Eli Lilly's stock performance and its relationship with the company's earnings growth.

Eli Lilly's revenue growth has been a significant driver of its stock performance. The company's revenue increased by 45% in the fourth quarter of 2024 compared to the same period in 2023, driven by a 48% increase in volume and the launch of new products like Zepbound and Mounjaro. These new products contributed to a $3.15 billion increase in New Products revenue and a $5.95 billion increase in Growth Products revenue.

The company's profit margins have also improved during this period. Eli Lilly's gross margin was 81.31% in the last 12 months, with operating and profit margins of 38.86% and 23.51%, respectively. This indicates that the company has been able to maintain a strong bottom line despite lower realized prices.

Eli Lilly's earnings growth has been even more impressive, with a 102% increase in Q4 2024 EPS compared to Q4 2023. This growth was driven by the company's strong revenue performance and improved profit margins. The company's EPS growth was also supported by a 15.14% increase in the annual dividend, which indicates that the company is distributing a larger portion of its earnings to shareholders.



Acquisitions and strategic partnerships have also played a significant role in Eli Lilly's stock performance and earnings growth. The company's collaboration with Boehringer Ingelheim on Jardiance has been a successful strategic partnership, with Jardiance's revenue growing by 50% in the fourth quarter of 2024 compared to the year-earlier quarter, including a one-time benefit of $300 million. Additionally, the company's pending acquisition of Scorpion Therapeutics' mutant-selective PI3Kα inhibitor program has expanded Eli Lilly's pipeline and contributed to its growth.

Eli Lilly's strong financial performance has also been reflected in its stock price, which has increased by 63.22% so far this year. The company's stock price has outpaced its earnings growth due to its robust revenue growth, improved profit margins, and strategic acquisitions and partnerships.

In conclusion, Eli Lilly's stock performance has outpaced its earnings growth over the past five years due to its strong revenue growth, improved profit margins, and strategic acquisitions and partnerships. The company's success in launching new products, maintaining a strong bottom line, and expanding its pipeline has contributed to its stock price outperformance. As Eli Lilly continues to execute on its growth strategy, investors can expect the company's stock to remain a strong performer in the biopharma sector.