Key Points
Eli Lilly is posting strong results, and that should continue.
The drugmaker is dominating in its core therapeutic area.
Lilly has several exciting pipeline candidates.
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Eli Lilly (NYSE: LLY) has crushed broader equities over the past five years, becoming the largest healthcare company -- and the first to be worth $1 trillion -- in the process.
Although some believe the stock is priced for perfection and there isn't much upside left, the drugmaker continues to prove the doubters wrong. It did so again with its most recent quarterly update.
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Let's consider three reasons to invest in the stock.
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1. Eli Lilly is posting outstanding financial results
The kind of top-line growth Eli Lilly has been posting is nothing short of phenomenal for a pharmaceutical giant, in an industry where year-over-year revenue increases with percentages in the low double digits are considered strong. During the fourth quarter, Lilly did it again: Sales totaled $19.3 billion, up 43% year over year; adjusted earnings per share were $7.54, up 42% compared to the year-ago period.
Eli Lilly's growth will slow significantly this year -- its guidance for revenue of between $80 billion and $83 billion implies top-line growth of 25% at the midpoint. But that was still ahead of analysts' expectations and looks very strong given the context, including the fact that Lilly had to lower the prices of some of its key medicines to comply with requests from the Trump administration. Eli Lilly should continue posting strong financial results, and that's still a good reason to buy the stock.
2. Lilly is gaining ground in an all-important market
The company's work in diabetes and weight management is doing most of the heavy lifting. Its tirzepatide drug, sold under the brand names Mounjaro and Zepbound, generated well over $30 billion in sales in 2025 and is now the world's best-selling compound.
It's no secret that Eli Lilly is competing with Novo Nordisk in the diabetes and weight loss niches, but Lilly is clearly winning the battle. It reported that its share of the market for incretin analogs (medicines that mimic the action of gut hormones like GLP-1) has steadily grown since 2023, reaching 60.5% by the end of 2025. Novo Nordisk's market share has been moving in the opposite direction, and now stands at just 39.1%. Eli Lilly should continue dominating this market, and that's excellent news.
3. Lilly has some exciting pipeline candidates
Here's another reason Lilly will remain the leader in this space: The company has several promising candidates that will strengthen its already market-leading portfolio. Its oral GLP-1 medicine, orforglipron, could earn approval by 2026's second quarter. Its compound retatrutide (which targets three different hormones related to weight loss) posted excellent phase 3 results. And there's more where those came from.
Eli Lilly is showing no signs of slowing down, whether we're talking about its pipeline or its commercial progress. The stock could still have plenty of upside; it's not too late to buy.
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Prosper Junior Bakiny has positions in Eli Lilly and Novo Nordisk. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
