Eli Lilly and Company (LLY) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Eli Lilly and Company

Updated on September 22, 2026 · accounts published on August 5, 2026

Reading of September 21, 2026: An exceptional business

Eli Lilly trades at a P/E of 39.0, 43 % above its sector median, with revenue up 44.7 % and an operating margin of 49.7 % over the last 12 months.

• Is Eli Lilly expensive or cheap? It trades at a P/E of 39.0 over the last 12 months, 43 % above its sector median and higher than in 72 % of the past decade's quarters.
• How is the business doing? Revenue grew 44.7 % and EPS 96.0 % over the last 12 months, and the operating margin of 49.7 % nearly doubles its 2014-2025 average.
• How strong is the balance sheet? Net debt of $40.12 per share is 3.5 % of the price and 1.3× EBITDA, with the dividend raised for 11 straight years.
• What to expect from the next earnings? Results land October 29, 2026, with consensus EPS of $9.85 after a 30.9 % beat in August, the biggest in eight quarters.
• Does it invest enough in R&D and turn profit into cash? R&D absorbs 20.5 % of revenue, above the 15 % healthy line, but free cash flow was only 43.5 % of net income in fiscal 2025.

Is Eli Lilly expensive or cheap?

At 39.0× earnings over the last 12 months, Eli Lilly sits 21 % above its own ten-year average of 32.2× and 43 % above the 27.3× median of the 225 healthcare companies it competes with. The decade has ranged from 16.1× to 75.1×, so this is far from a record, but the stock has been cheaper in 72 % of the quarters of the last decade. A 1.3 % free cash flow yield and a P/B of 30.7× leave little room for disappointment after a 56 % gain in 12 months, with the price 9 % below its 52-week high of $1,280.34.

How is the business doing?

Growth is the strong point: revenue rose 44.7 % and EPS 96.0 % over the last 12 months, and the 49.7 % operating margin is close to double the 27.8 % average of the twelve fiscal years from 2014 to 2025. Fiscal 2025, at 45.6 %, was already the best of that run, and the last 12 months have gone further. Net margin is 33.5 % and ROIC 31.0 %, 25.4 points above the 5.6 % median of 358 healthcare peers, with returns on capital above 10 % in nine of the last ten fiscal years.

How strong is the balance sheet?

Gross debt of $48.22 per share against $8.09 of cash left $40.12 of net debt in fiscal 2025, equal to 3.5 % of today's price and 1.3× EBITDA, well inside the 2.5× line healthcare investors treat as safe. Debt to equity of 1.62 is the one figure that stands out, but a current ratio of 1.35, an Altman Z of 8.7 in safe territory and a Piotroski score of 7 out of 9 point the other way. The dividend yields 0.6 % with a 26 % payout, raised 11 years running.

What to expect from the next earnings?

Eli Lilly reports on October 29, 2026, and consensus calls for EPS of $9.85. The bar has been cleared repeatedly: estimates were beaten in seven of the last eight quarters, and on August 5, 2026 the company posted $8.38 against $6.40 expected, a 30.9 % surprise and the biggest in absolute terms of those eight quarters. The 2026 estimate has barely moved in the last seven days, from $36.39 to $36.41 across 15 analysts. Of the 45 analysts covering the stock, 33 say buy, 9 hold and 3 sell.

Does it invest enough in R&D and turn profit into cash?

In healthcare the pipeline is the invisible asset and expiring patents are revenue that evaporates, so the figures that matter are innovation spending and cash conversion rather than the usual industrial yardsticks. Eli Lilly put 20.5 % of revenue into R&D in fiscal 2025, above the 15 % considered healthy, and its 83.8 % gross margin clears the 70 % expected of branded pharma. EPS compounded at 28.8 % a year between fiscal 2020 and 2025, far beyond the 8 % benchmark. The weak spot is cash: free cash flow was 43.5 % of net income in fiscal 2025, less than half the 90 % that counts as healthy.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.