Highly Regarded

Is Eli Lilly and Company (LLY) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Healthcare sector peers in our coverage

204% Premium TTM fundamentals · sector averages from covered peers

LLY trades at 58.8× TTM earnings — a 204% premium to its Healthcare sector average of 19.3× in our coverage.

The Numbers

P/E (TTM)

58.8×

Sector avg: 19.3×

P/S (TTM)

18.1×

Sector avg: 3.7×

Market Cap

$1.08T

EPS (TTM): $20.44

Revenue (TTM)

$59.42B

Net income: $18.41B

Healthcare Peer Comparison

How LLY's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
LLY This page $1201.42 58.8×
JNJ $259.33 25.0×
UNH $418.05 21.8×
MRK $126.81 16.8×
PFE $23.74 13.8×

Is the Premium Justified?

July 6, 2026

Eli Lilly's P/E ratio of 59.0x, a substantial premium to the healthcare sector average of 27.2x, is largely justified by the exceptional growth of its GLP-1 drug portfolio. In Q1 2026, the company reported a 56% surge in worldwide revenue, primarily fueled by Mounjaro and Zepbound, which saw sales increase by 125% and 80% respectively. These blockbuster drugs now constitute a significant portion of total revenue, and the recent FDA approval of Foundayo, an oral GLP-1, further strengthens its market position. The elevated valuation reflects strong investor confidence in Eli Lilly's innovative pipeline, market leadership in high-demand therapeutic areas, and robust future earnings potential, despite some pricing headwinds.

Sources

Frequently Asked Questions

Is LLY overvalued or undervalued?
On trailing-twelve-month earnings, LLY trades at 58.8x versus a Healthcare sector average of 19.3x in our coverage — a 203.9% premium. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing LLY with its own Healthcare peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Healthcare names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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JNJ ABBV PFE UNH MRK