Over the past six months, Eli Lilly’s stock price fell to $872.91. Shareholders have lost 8.3% of their capital, which is disappointing considering the S&P 500 has climbed by 8.9%. This might have investors contemplating their next move.
Following the drawdown, is now the time to buy LLY? Find out in our full research report, it’s free.
Why Are We Positive On Eli Lilly?
Founded in 1876, Eli Lilly (NYSE:LLY) is a global pharmaceutical company that develops and produces a wide range of medicines and vaccines for medical conditions such as diabetes, cancer, and mental health disorders.
1. Long-Term Revenue Growth Shows Strong Momentum
A company’s long-term sales performance signals its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Eli Lilly grew its sales at a solid 15.1% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers. 
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Eli Lilly’s EPS grew at an astounding 17.7% compounded annual growth rate over the last five years, higher than its 15.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROIC Showcases Lucrative Growth Opportunities
Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
Eli Lilly’s five-year average ROIC was 27.3%, placing it among the best healthcare companies. This illustrates its management team’s ability to invest in highly profitable ventures and produce tangible results for shareholders.
Final Judgment
These are just a few reasons why we think Eli Lilly is one of the best healthcare companies out there. After the recent drawdown, the stock trades at 36.3× forward price-to-earnings (or $872.91 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
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