Up 36%, Is Eli Lilly Still a Buy?

When I last wrote about Eli Lilly (NYSE: LLY) back in September, the shares were only slightly positive for the year. My view at the time was straightforward: This was a stock that just about every long-term investor should own. Since then, Eli Lilly has gone on an impressive run, climbing more than 36%.

While I'm obviously happy that the call worked out, the more important question now is whether the stock is still worth buying after such a strong move. Based on recent results and guidance, I believe the answer is yes.

The core reason for this optimism hasn't changed. Eli Lilly's momentum in weight loss and diabetes drugs remains exceptionally strong, and the company's third-quarter results highlight just how powerful this trend has become.

Q3 results and weight loss momentum

When I previously covered Eli Lilly, the company was coming off its second-quarter earnings report, which already showed impressive growth. Revenue increased 38% year over year, while earnings per share surged 92% to $6.92 per share. Those numbers alone would have been enough to justify optimism, but the third quarter only strengthened the broader narrative.

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In the third quarter, Eli Lilly delivered year-over-year revenue growth of 54%, bringing total revenue to $17.6 billion. Earnings per share increased in a monumental amount during the quarter. Year over year, third quarter earnings increased from $1.07 per diluted share in Q3 2024, to a whopping $6.21 per diluted share in Q3 2025.

For most large-cap companies, growth of that magnitude would be extraordinary. For a pharmaceutical giant of Eli Lilly's size, it underscores just how transformative its current product portfolio has the potential to be. In all, net income was up 127% year over year through the first three quarters of 2025.

The main drivers behind this surge continue to be the company's weight loss and diabetes treatments. Mounjaro, one of Eli Lilly's flagship drugs, saw sales increase by 94% through the first three quarters of 2025, reaching $15.55 billion. That kind of growth is rare for a product that is already operating at blockbuster scale.

Meanwhile, Zepbound, Eli Lilly's weight loss-focused sister medication to Mounjaro, has been ramping up even faster. Sales jumped from just over $3 billion in the first three quarters of 2024 to $9.28 billion in the first three quarters of 2025.

Taken together, these figures demonstrate that Eli Lilly is not just benefiting from a short-term spike in demand. Instead, it is building a dominant position in two of the most important and fastest-growing areas of modern healthcare.

Guidance reinforces the bull case

Strong backward-looking results are encouraging, but forward guidance often matters more for a stock that has already rallied. Here again, Eli Lilly delivered. The company raised its full-year 2025 revenue guidance to a range of $63 billion to $63.5 billion. Even at the low end of that range, Eli Lilly would be looking at revenue growth just under 40% on an annual basis.

That kind of growth is exceptionally rare among megacap companies. Many large firms across the broader market would be thrilled to deliver high-single-digit or low-double-digit growth. Eli Lilly, by contrast, is operating in a completely different league right now, driven by category-defining drugs and strong execution.

Is Eli Lilly still a buy?

After the stock's 36% rally, it's natural to worry about chasing performance. Eli Lilly is not necessarily a cheap stock by traditional valuation measures, but elite businesses with sustained growth often command a premium. The key question is whether the company can continue to grow into that valuation, and current trends suggest it can.

Expected to report earnings in the next few weeks, Eli Lilly projected full-year earnings to be $21.8 to $22.50 per share. Conservatively, that would currently give the stock a P/E ratio of 49.5. With explosive revenue growth, dominant products in weight loss and diabetes, and guidance pointing to nearly 40% annual revenue expansion, Eli Lilly still has momentum firmly on its side.

If the company delivers anywhere close to its updated guidance, today's pricing may look modest in hindsight for long-term investors.

David Butler has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.