By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
While Eli Lilly's Q1 results are impressive, the panel is divided on the sustainability of its current growth trajectory and valuation. Concerns around pricing pressure, competition, and manufacturing constraints are prevalent.
Risk: Payer pushback on pricing and increased competition in the GLP-1 space
Opportunity: Potential for tirzepatide's superior efficacy to justify premium pricing
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
The success of Eli Lilly's <a href="/market-activity/stocks/lly">(NYSE: LLY)</a> diabetes treatment, Mounjaro, has now made it the top-selling drug on the planet, according to Bloomberg. And for investors, there are plenty of reasons to believe that the massive profits from Mounjaro and its weight-loss drug, Zepbound, will continue to drive huge returns for <a href="https://www.fool.com/investing/how-to-invest/stocks/how-to-invest-in-eli-lilly-stock/?utm_source=nasdaq&utm_medium=feed&utm_campaign=article&referring_guid=37b7ac0e-5d50-4279-85a4-478c86f43a55">Eli Lilly stock</a>.
Lilly released first-quarter earnings that showed Mounjaro generated $8.66 billion in sales, up from $3.84 billion a year ago. That vaulted Mounjaro past Keytruda, the cancer therapy manufactured by Merck, which has been the world's top-selling drug since the first quarter of 2023. Keytruda generated $7.9 billion in sales.
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Lilly said U.S. revenue for Mounjaro was $4.2 billion, up 59% from a year ago, and international revenue was $4.4 billion, up from $1.2 billion in Q1 2025. The company said the international growth was driven by the addition of Mounjaro to China's National Reimbursement Drug List (NRDL), which made it available to the Chinese market.
With Mounjaro growing quickly in the U.S. and now available in more than 55 countries, and coupled with the U.S. launch of another obesity treatment, Foundayo, Lilly's dominance in diabetes and anti-obesity medications appears set to continue throughout the year.
Let's dig into Lilly's earnings and the outlook for 2026.
Image source: Getty Images.
Overall, Lilly's revenue jumped by 56% to $19.79 billion in the first quarter from a year ago. Net income was $7.39 billion, up 168%, and earnings per share of $8.26 were up 170% from the first quarter of 2025.
Most of Lilly's revenue comes from the weight-loss drug Zepbound and from Mounjaro, which is approved by U.S. regulators for treating Type 2 diabetes but has been prescribed off-label for weight loss.
| Product | Q1 2026 Sales | Q1 2025 Sales | | --- | --- | --- | | Mounjaro | $8.882 billion | $3.842 billion | | Zepbound | $4.160 billion | $2.312 billion | | Jayprica | $165 million | $92 million | | Ebglyss | $145 million | $60 million | | Kisunla | $124 million | $22 million | | Omvoh | $80 million | $37 million | | Inluriyo | $35 million | --- | | Total Revenue | $19.799 billion | $12.729 billion |
Source: Eli Lilly
An estimated 40.3% of adults in the U.S. are considered obese, while the most recent data from the World Health Organization indicates that 16% of the global population is obese.
That's why management has such high hopes for Foundayo, the anti-obesity pill that went on sale in the U.S. in April. More than 20,000 patients have taken the pill so far, and it's been prescribed by more than 8,000 physicians. "While the U.S. approval is an important first step, there are over 1 billion people around the world with obesity and related conditions who can be helped by taking an incretin like Foundayo," CEO Dave Ricks told analysts on the company's <a href="https://www.fool.com/earnings/call-transcripts/2026/04/30/eli-lilly-lly-q1-2026-earnings-transcript/?utm_source=nasdaq&utm_medium=feed&utm_campaign=article&referring_guid=37b7ac0e-5d50-4279-85a4-478c86f43a55">earnings call</a>.
It appears so. More countries are approving Mounjaro, and it's getting increased acceptance in U.S. markets, where the obesity rate is much higher. When you take into account the fast-growing sales of Zepbound and the potential of Lilly's new treatment in a pill form with Foundayo, Lilly's future is bright. The company is expected to see revenue of $84.4 billion this year, rising to nearly $100 billion by 2027.
That makes Eli Lilly stock a no-brainer <a href="https://www.fool.com/investing/how-to-invest/stocks/?utm_source=nasdaq&utm_medium=feed&utm_campaign=article&referring_guid=37b7ac0e-5d50-4279-85a4-478c86f43a55">stock to buy</a>.
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<a href="https://www.fool.com/author/20563/">Patrick Sanders</a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Merck. The Motley Fool has a <a href="https://www.fool.com/legal/fool-disclosure-policy/">disclosure policy</a>.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Eli Lilly's current valuation fully discounts its near-term growth, shifting the risk-reward profile from 'growth' to 'execution-dependent' at current price levels."
Eli Lilly's Q1 results are undeniably impressive, but the 'no-brainer' label is dangerous. While Mounjaro’s dominance is clear, the market is pricing in perfection. With revenue projected to hit $100 billion by 2027, the stock trades at a massive premium that leaves zero room for execution errors, supply chain bottlenecks, or potential legislative pushback on drug pricing. The transition from injectable to oral treatments like Foundayo is the right strategic move to maintain a competitive moat against Novo Nordisk, but the valuation already assumes total market capture. Investors must weigh this hyper-growth against the inevitable margin compression that occurs when GLP-1s become a commodity rather than a premium specialty product.
If Lilly successfully scales oral GLP-1 production and maintains pricing power, the current valuation could actually look cheap given the massive total addressable market for obesity treatments.
"LLY's GLP-1 franchise dominance positions it for $100B revenue by 2027, but global supply chain execution will determine if growth sustains triple-digit quarterly ramps."
Eli Lilly's Q1 results are stellar: Mounjaro sales exploded to $8.88B (131% YoY), overtaking Keytruda's $7.9B, with Zepbound at $4.16B fueling 56% total revenue growth to $19.8B and EPS up 170% to $8.26. China NRDL inclusion drove international Mounjaro to $4.4B from $1.2B, and Foundayo's U.S. pill launch targets 1B+ global obese patients beyond injectables. Projections of $84.4B revenue in 2026 and $100B by 2027 look achievable given 40% U.S. obesity rate. However, the article omits Novo Nordisk's Wegovy ramp and past supply shortages that capped prior growth—flawless manufacturing scale-up is essential for sustaining momentum.
Novo Nordisk's semaglutide (Wegovy/Ozempic) remains a fierce competitor with comparable efficacy and established supply, potentially eroding Lilly's market share, while payers demand pricing concessions amid off-label use scrutiny.
"LLY's growth is real but already priced in; the stock's upside depends on beating consensus margin assumptions while competitors close the competitive moat."
LLY's Q1 results are genuinely impressive—$8.66B Mounjaro sales (+126% YoY) and 170% EPS growth is real. But the article conflates revenue momentum with valuation safety. At current multiples, LLY is pricing in $100B revenue by 2027 and sustained margin expansion. The obesity market is real, but we're seeing early-stage adoption curves, not mature cash cows. Foundayo has 20K patients after launch—meaningful but not transformative yet. The article ignores: (1) competitive pressure from Novo Nordisk (NVO) and Amgen (AMGN) in GLP-1s, (2) reimbursement headwinds (insurance pushback on obesity drugs is rising), (3) manufacturing constraints that plagued Mounjaro in 2024, and (4) off-label Mounjaro cannibalization of Zepbound margins.
If LLY sustains 20%+ revenue CAGR through 2027 with 40%+ operating margins, current valuation (~35x forward P/E) compresses to reasonable levels—and the obesity TAM genuinely justifies premium multiples versus legacy pharma.
"Valuation risk: without continued GLP-1 growth and margin expansion, Lilly's multiple compresses as competition tightens."
While Lilly's quarterly numbers show Mounjaro and Zepbound delivering blockbuster revenue, the article glosses over structural risks. Long-run demand hinges on continued expansion of indications, international uptake, and payer acceptance; yet the GLP-1 space is becoming crowded with Novo Nordisk and others stepping up. Foundayo's U.S. launch adds optionality but also regulatory and safety scrutiny. China NRDL inclusion is encouraging but not a guarantee of durable growth; price pressure and reimbursement hurdles loom. The 2027 revenue target of near $100B relies on aggressive uptake and margin capture; a slowdown or a patent/competition shock could compress Lilly's multiple and earnings trajectory.
The strongest countercase is that Lilly's GLP-1 franchise could prove stickier than feared, with durable demand, favorable payer dynamics, and more approvals—meaning the bearish view may be proven wrong in the near term.
"Lilly's current valuation ignores the inevitable compression of net realized prices as GLP-1s transition to mass-market chronic care."
Claude and Grok are fixated on the $100B revenue target, but both ignore the 'Payer Cliff.' As GLP-1s move from niche specialty to chronic mass-market, employers and Medicare will force aggressive rebates. Lilly’s operating margins are currently inflated by premium pricing; if net realized prices drop by 20% to secure formulary access, the EPS growth model collapses. The market isn't just pricing in volume growth; it's assuming pricing power that is fundamentally unsustainable in a commoditized market.
"Tirzepatide's efficacy edge and payer cost savings sustain pricing power despite rebates."
Gemini fixates on payer rebates eroding margins, but ignores tirzepatide's superior efficacy—~22% weight loss vs. Wegovy's ~15% (per SURMOUNT/STEP trials)—which justifies premium pricing even in mass-market. Payers face massive offsets from reduced diabetes/CVD costs ($500B+ annual U.S. burden); rebates are priced in, not a cliff. Lilly's $9B+ 2024 manufacturing capex also crushes supply shortage risks Claude flags.
"Clinical superiority buys pricing power at the margin, not immunity from structural rebate compression in mass-market chronic care."
Grok's efficacy premium argument is sound, but conflates clinical superiority with payer leverage. A 7-point weight-loss gap justifies *some* premium, not immunity from rebates. The $500B offset claim assumes perfect payer math—but Medicare negotiation power (post-IRA) and employer self-insurance mean Lilly faces real pricing pressure regardless of SURMOUNT data. Capex spending is necessary, not sufficient, to prevent shortages. Gemini's payer cliff remains the underpriced tail risk.
"Net pricing risk from rebates could crush Lilly's EPS growth even if demand remains strong; margins matter as much as expansion in revenue."
Gemini correctly warns on pricing, but the 'payer cliff' isn't a tail risk—it's a baseline in many markets. Even with tirzepatide's higher efficacy, rebates and formulary access will erode net prices as obesity becomes mass-market. A net price haircut of 15–30%, plus ongoing capex, could erase 2026–27 EPS growth unless volume surges or new indications unlock offsetting margins. Net pricing sensitivity matters more than headline gross margins.
While Eli Lilly's Q1 results are impressive, the panel is divided on the sustainability of its current growth trajectory and valuation. Concerns around pricing pressure, competition, and manufacturing constraints are prevalent.
Potential for tirzepatide's superior efficacy to justify premium pricing
Payer pushback on pricing and increased competition in the GLP-1 space