The most useful comparison is not “which stock rose more?” It is whether Eli Lilly’s growth, profitability, cash generation and pipeline justify its valuation relative to carefully selected peers at the same date. Build the comparison in two layers: first measure operating quality using matching financial periods and accounting bases; then test whether the market price already discounts the growth and risks you identify. This is educational information, not a recommendation to buy or sell any security.
The latest Lilly figures covered here are its second-quarter 2026 results released August 5, 2026, and its 2025 Form 10-K filed February 12, 2026. Prices, market capitalizations, analyst estimates and valuation multiples must be refreshed on one stated date before you draw an investment conclusion.
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Start with a dated, like-for-like comparison
Write the “as of” date at the top of your worksheet. For every company, record the latest annual and quarterly reporting periods, share price, diluted share count, market capitalization, cash, debt, consensus estimates and currency. A number without its period and accounting basis can produce a misleading ranking.
Use Lilly’s reported figures as reported, then identify where peers use adjusted or non-GAAP measures. Do not compare a peer’s adjusted earnings per share with Lilly’s GAAP diluted EPS without displaying the reconciliation or clearly labeling the difference. Keep quarterly figures separate from trailing-12-month figures and from management’s forward guidance.
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Lilly’s current reference points
| Measure | Period and date | Reported figure | How to use it |
|---|---|---|---|
| Revenue | Fiscal 2025; Form 10-K filed February 12, 2026 | $65.179 billion | Use as the annual base for growth and margin calculations. |
| Net income | Fiscal 2025; Form 10-K filed February 12, 2026 | $20.640 billion | Use with GAAP diluted shares to calculate reported earnings measures. |
| Diluted EPS | Fiscal 2025; Form 10-K filed February 12, 2026 | $22.95 | Do not mix with an adjusted peer EPS series. |
| Revenue growth | 2025 versus 2024 | 45% | Investigate volume, price, mix, currency and acquisitions rather than treating growth as a single quality score. |
| Revenue | Second quarter 2026, released August 5, 2026 | $23.0 billion, up 48% year over year | Compare with peers’ second-quarter 2026 periods, not with a different quarter. |
| 2026 revenue guidance | Management guidance issued August 5, 2026 | $85–$87 billion | A forecast, not a guaranteed result. |
| 2026 reported EPS guidance | Management guidance issued August 5, 2026 | $35.50–$36.50 | Keep separate from analyst estimates and non-GAAP guidance. |
Lilly said second-quarter growth was chiefly driven by volume for Mounjaro and Zepbound. The release also disclosed acquired in-process research and development charges, so explain those charges when discussing reported earnings and distinguish reported results from any underlying, company-adjusted presentation.
Chair and CEO David A. Ricks described the quarter this way: “Lilly’s momentum continues, as we delivered 48% revenue growth and raised our full-year guidance.” That is management’s characterization, not independent evidence that the guidance will be achieved.
Build two peer groups instead of one
Therapeutic competitors
Begin with companies that sell medicines in the same disease areas. For Lilly’s cardiometabolic opportunity, Novo Nordisk is a relevant therapeutic comparator because both companies compete for patients, prescribers, payer coverage and manufacturing capacity in obesity and diabetes treatments. Add other companies only when they have a material commercial or clinical overlap with the specific product or indication being examined.
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A therapeutic set answers questions such as: Is Lilly gaining share? Are competitors introducing products with better efficacy, tolerability, dosing or access? Is a new trial changing the expected market size? It should not be diluted with companies whose businesses have little exposure to the same therapies.
Large-pharmaceutical business peers
For diversification, balance-sheet strength and mature-pharmaceutical economics, Lilly’s 2025 Form 10-K lists this 14-company peer group:
- AbbVie
- Amgen
- AstraZeneca
- Bristol Myers Squibb
- Gilead Sciences
- GSK
- Johnson & Johnson
- Medtronic
- Merck & Co.
- Novartis
- Pfizer
- Roche
- Sanofi
- Stryker
Lilly says it revised this group for 2025. It is a company-selected compensation and business-context group, not necessarily a direct therapeutic peer list. Label the two lenses in your spreadsheet and do not use the broader group to imply that every company faces the same patent, pipeline or product-market conditions.
Compare operating performance on matching periods
Revenue quality
For each company, split revenue growth into volume, realized price, product mix, foreign exchange and acquisitions or divestitures when the filing provides the detail. Lilly’s 2025 revenue grew 45% over 2024, with volume growth partly offset by lower realized prices. That combination is materially different from growth created mainly by price increases, and it has different implications for payer pressure and future margins.
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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteCompare the same fiscal year and the same quarter across the peer set. Record whether the period is a 13-week quarter, a calendar quarter or a company-specific fiscal quarter. A trailing-12-month comparison can smooth seasonality, but it must be calculated from consistently defined quarters.
Margins and earnings
Capture gross margin, operating margin, net margin and diluted EPS, with the accounting basis beside each number. Lilly’s 2025 filing reports higher gross margin alongside increased research and development and selling expenses. Examine whether margin expansion comes from sustainable scale, product mix, temporary costs, licensing income or one-time charges.
When a company highlights adjusted operating income or adjusted EPS, list the excluded items. Common exclusions can include acquired in-process research and development, amortization, restructuring, litigation or other unusual charges. A peer’s adjusted margin is not directly comparable with Lilly’s GAAP margin unless you normalize both series using a consistent rule.
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Cash generation, investment and financial capacity
Compare operating cash flow, capital expenditures, free cash flow, research and development spending, cash balances and debt. Define free cash flow in your worksheet—for example, operating cash flow minus capital expenditures—and use the same definition for every company.
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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11- Operating cash flow: tests whether reported earnings convert into cash after working-capital movements.
- Free cash flow: shows cash remaining after stated capital investment, but definitions vary.
- R&D intensity: research and development divided by revenue indicates how much current sales support future products.
- Net debt and liquidity: help assess the ability to fund trials, acquisitions, manufacturing expansion and shareholder returns.
Do not treat high R&D as automatically good or bad. A company can spend heavily and still produce weak clinical or commercial returns; a mature company can spend less as a percentage of sales while facing greater patent-loss risk.
Value the earnings the business must deliver
Valuation is a separate question from operating quality. Before calculating a multiple, refresh every company’s share price, diluted share count, cash, debt and earnings or cash-flow estimate to one stated date. The material reviewed here does not provide a synchronized peer price, market-capitalization or consensus-estimate snapshot, so it does not establish that Lilly is currently cheap, expensive or fairly valued relative to peers.
Core calculations
| Measure | Formula | Decision use |
|---|---|---|
| Market capitalization | Share price × diluted shares outstanding | Shows the equity value investors are pricing. |
| Price-to-earnings | Share price ÷ EPS, or market capitalization ÷ net income | Use trailing GAAP, forward GAAP or adjusted figures only when clearly labeled. |
| Enterprise value | Market capitalization + debt + other debt-like claims − cash and equivalents | Useful when capital structures differ, provided every company is treated consistently. |
| Free-cash-flow yield | Free cash flow ÷ market capitalization | Shows cash return relative to equity value; define free cash flow first. |
| EV/operating cash flow or EV/EBITDA | Enterprise value ÷ the selected cash-flow or earnings measure | Can aid comparisons, but accounting and adjustment policies must match. |
For a growth company, a high multiple may reflect expectations for years of rising volume, expanding indications and durable pricing. For a diversified or slower-growing company, a lower multiple may reflect imminent exclusivity losses, litigation, weak pipeline productivity or balance-sheet constraints. A lower multiple alone is not proof of better value.
Use a sensitivity table rather than one-point precision. Show what happens to the multiple or implied return if revenue growth, operating margin, launch timing, terminal growth or discount rate changes. Keep Lilly’s $85–$87 billion 2026 revenue guidance and $35.50–$36.50 reported EPS guidance in a management-guidance column; do not silently substitute either range for an independent estimate.
Test product concentration and durability
Mounjaro and Zepbound together represented 56% of Lilly’s total revenue in 2025. That concentration demonstrates commercial strength while creating a single-theme risk: a change in demand, coverage, competition, safety information, manufacturing output or pricing can affect a large portion of company revenue.
Questions for the leading products
- Is demand increasing because of new patients, higher persistence, geographic expansion, broader indications or temporary channel stocking?
- How do efficacy, safety, dosing and convenience compare with competing therapies?
- Are payers restricting access through prior authorization, step therapy or reimbursement limits?
- Can manufacturing capacity meet demand, and how quickly can new plants or processes be qualified?
- What patent, regulatory-exclusivity and litigation milestones could change the period of economic protection?
- How much of the company’s revenue would remain if the leading products grew more slowly than expected?
Apply the same analysis to every peer’s leading products. A company with lower current growth may have a more diversified revenue base; another may have less concentration but a larger near-term patent cliff. Compare those trade-offs explicitly rather than rewarding concentration or diversification automatically.
Risk-adjust the pipeline
Separate products already approved and generating sales from submitted applications, Phase 3 programs, earlier clinical programs and discovery research. These stages have different probabilities, timelines, costs and regulatory risks.
Use an evidence ladder
- Approved products: verify current labels, indications, safety information, reimbursement and actual sales.
- Regulatory submissions: check the application, review status and possible decision dates; submission is not approval.
- Phase 3 programs: examine randomized design, endpoints, comparator, population, effect size, adverse events and whether results are topline or fully reported.
- Earlier-stage programs: assign substantial uncertainty to trial success, dose selection, safety, durability and commercial positioning.
- Discovery programs: treat them as options, not forecast revenue.
Lilly reported that more than 25 Phase 3 trials achieved positive topline results in 2025. That company-reported count does not by itself establish approval, launch timing or future revenue. In its August 5, 2026 release, Lilly reported additional positive Phase 3 retatrutide data and a plan to submit a U.S. application in the first quarter of 2027. The plan is a company statement, not an approval or a certain launch.
Score commercial readiness
For each major candidate, record the target indication, addressable population, trial endpoint, competitive differentiation, regulatory path, manufacturing readiness, expected payer access and launch dependencies. A medicine with strong efficacy but difficult production or restricted reimbursement may contribute less value than a clinically similar product that can be supplied and covered broadly.
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Compare resilience and downside risks
Read each company’s latest annual report and quarterly report, not just the earnings presentation. Lilly identifies pharmaceutical development as costly and uncertain: candidates can fail at any stage, and expanding or changing manufacturing capacity requires time, capital, process work and regulatory approval.
Put the following risks in a side-by-side matrix:
| Risk area | What to examine |
|---|---|
| Patent and exclusivity | Key expiry dates, litigation, generic or biosimilar threats and the share of sales exposed. |
| Pricing and reimbursement | Government rules, payer negotiations, discounts, rebates, access restrictions and geographic mix. |
| Safety and regulation | Label changes, adverse-event signals, inspections, recalls, trial holds and regulatory actions. |
| Competition | Rival efficacy, tolerability, convenience, manufacturing scale, launch timing and intellectual property. |
| Supply and manufacturing | Capacity, single-source suppliers, quality issues, raw materials, technology transfer and geographic concentration. |
| Financial and currency exposure | Debt maturities, interest costs, foreign-exchange sensitivity, acquisition commitments and cash requirements. |
| Litigation | Product liability, patent disputes, commercial claims and whether disclosed amounts are material or uncertain. |
Also check whether a company’s risk is diversified across therapeutic areas, countries, products and customers. Diversification can reduce dependence on one launch, but it can also make growth slower and analysis more complex.
Use a repeatable comparison worksheet
- Set the date: choose one valuation date and write down the latest reporting period available for each company.
- Define the peer lenses: create a therapeutic-competition list and a broader large-pharmaceutical list; do not merge their conclusions.
- Normalize accounting: select GAAP or a consistently reconciled adjusted basis for revenue, earnings, margins and cash flow.
- Enter operating data: record growth, volume and price drivers, margins, R&D, operating cash flow, free cash flow, debt and liquidity.
- Map concentration: list leading products, their revenue shares, indications, competitors and exclusivity dates.
- Map the pipeline: classify each important program by development stage and assign separate assumptions for approval, launch, uptake and reimbursement.
- Calculate valuation: compute trailing and forward P/E, enterprise-value ratios and free-cash-flow yield with formulas shown.
- Run scenarios: model base, upside and downside cases for growth, margin, launch timing, competition, pricing and manufacturing.
- Write the disconfirming case: state what would make your thesis wrong and which upcoming filing, trial result, regulatory action or price change would reveal it.
- Set a refresh schedule: update after every earnings release, material trial readout, approval decision, major pricing change or manufacturing announcement.
Common comparison errors
- Using different dates: a current Lilly price beside a six-month-old peer price creates a false spread.
- Mixing accounting bases: adjusted peer EPS and Lilly GAAP EPS can make one company look cheaper without a real difference.
- Counting pipeline headlines as sales: positive topline data, a regulatory submission or management guidance is not realized revenue.
- Ignoring concentration: rapid growth can conceal dependence on one product category; Lilly’s 56% Mounjaro-and-Zepbound share is a practical example.
- Ranking by P/E alone: the denominator may be temporarily depressed, inflated by one-time items or based on different estimates.
- Comparing company-selected peers as if they were therapeutic peers: Lilly’s 14-company group includes businesses with very different products and economics.
- Assuming guidance is a promise: the $85–$87 billion revenue and $35.50–$36.50 reported EPS ranges are management guidance for 2026, not guaranteed outcomes.
- Stopping at the investor presentation: filings contain details on pricing, safety, litigation, supply, debt, exclusivity and accounting adjustments that may be omitted from headline materials.
How to interpret the finished comparison
A strong result should identify the operating leader, the valuation leader and the risk-adjusted opportunity separately. Lilly may rank highly on recent growth while still requiring demanding future execution; a mature peer may show slower growth but stronger diversification or a lower price relative to normalized cash flow. Your conclusion should explain which assumptions create the difference and how sensitive it is to competition, access, patents, manufacturing and pipeline outcomes.
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