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Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
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Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
Valuation and assumptionsLilly's exceptional margins and growth are driven by a launch-phase dynamic in tirzepatide that may not be fully sustainable. The central tension is whether volume growth and pipeline success can offset accelerating pricing pressure as competition intensifies.
At roughly $1,130 per share, the market appears to price in 12-15% annual revenue growth for a decade, terminal operating margins of 35-40%, and a competitive advantage period of 10-15 years. These are demanding but not unreasonable assumptions for a company with Lilly's track record.
U.S. net realized pricing: a 3% decline in Q2 2026 offset some volume growth. A sustained acceleration in price declines would compress margins and reduce terminal value.
Competition intensifies and pricing pressure accelerates, with U.S. net prices declining 8-10% annually and volume growth slowing to 8-10%. Revenue growth decelerates to 5-8%, gross margin compresses to 80%, and operating margin falls to 35%, resulting in intrinsic value of approximately $700 per share.
Lilly maintains its competitive position with volume growth remaining strong, particularly internationally. Pricing declines modestly at 2-3% annually. Foundayo and retatrutide launch successfully. Revenue grows 12-15% annually with operating margins of 40-45%, yielding intrinsic value of approximately $1,130 per share.
Retatrutide is approved and becomes the dominant obesity treatment, Foundayo captures significant oral GLP-1 share, and international expansion exceeds expectations. Revenue grows 18-20% annually with gross margin expanding to 88% and operating margin reaching 52%, yielding intrinsic value of approximately $1,600 per share.
The platform tables did not store operating income, stock-based compensation, or capital expenditure for LLY. Operating income and margins were sourced from secondary financial data providers. Capital expenditure was estimated based on announced manufacturing commitments and management commentary. The exact breakdown of U.S. versus international net realized pricing is not disclosed at the product level. The precise WACC components rely on estimated beta, risk-free rate, and equity risk premium.
These model scenarios depend on their inputs. Review the assumptions and supporting evidence alongside the implied values.
earnings multiple v2 · as of 2026-10-18
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