Revenue surged 38% to $65.2B in FY2025 as Mounjaro and Zepbound scaled. With manufacturing constraints easing and retatrutide data approaching, we're raising our revenue estimate to $90-100B by 2028.
When we last covered Eli Lilly — in our deep dive on the GLP-1 market expansion — the central question was whether Mounjaro and Zepbound could sustain their growth rates as manufacturing scaled and competition intensified. Six months later, the answer is emphatic. Revenue surged to $65.2 billion in FY2025, up from $47.2 billion the prior year — a 38% year-over-year acceleration driven almost entirely by the GLP-1 franchise.
The market continues to reward the growth, pushing Lilly's market cap to $853 billion. At 27.5x forward earnings, the stock is not cheap in absolute terms. But for a pharmaceutical company growing revenue at 38% with a 44.9% operating margin and a pipeline that includes next-generation obesity and Alzheimer's therapies, the multiple is defensible.
The biggest risk we identified previously was manufacturing capacity. Demand for tirzepatide — the active ingredient in both Mounjaro (diabetes) and Zepbound (obesity) — far outstripped supply through most of 2024 and early 2025. Lilly invested $18 billion in manufacturing expansion across facilities in Indiana, North Carolina, Ireland, and Germany.
Those investments are now bearing fruit. Management guided for supply constraints to ease materially by mid-2026, and the quarterly prescription data confirms it — new patient starts for Zepbound accelerated 45% quarter-over-quarter in Q4 2025, suggesting the supply tap is opening.
This matters because the GLP-1 market is demand-constrained only by supply. Every survey of prescribing physicians shows unmet demand multiples above current fill rates. When supply normalises, the revenue ramp could steepen further.
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Novo Nordisk's semaglutide (Ozempic/Wegovy) remains a formidable competitor, but head-to-head data consistently favours tirzepatide on weight loss efficacy — 22.5% body weight reduction versus 15-17% for semaglutide. In a market where patients are paying $1,000+ per month out of pocket, efficacy drives preference.
The next generation of GLP-1 therapies — oral formulations and combination molecules — further favours Lilly. The company's orforglipron (oral GLP-1) and retatrutide (triple agonist) are in late-stage trials with data readouts in 2026-2027. Retatrutide, in particular, showed 24% weight loss in Phase 2 — a result that could make it the most effective obesity drug ever developed.
The historical pattern is clear. The company that wins the next-generation race in a new therapeutic class almost always captures disproportionate market share. Lilly is positioned to do exactly that.
Net income reached $20.6 billion in FY2025, up from $10.6 billion the prior year. Free cash flow hit $9 billion — impressive, though suppressed by the $18 billion manufacturing capex cycle. As that capex normalises post-2027, free cash flow should expand to $25-30 billion annually.
At the current $853 billion market cap, Lilly trades at 27.5x forward earnings and roughly 95x free cash flow. The FCF multiple looks alarming until you adjust for peak-cycle capex. On normalised FCF of $25 billion, the multiple drops to 34x — rich but not irrational for a company growing at 30%+.
The seven Buy-rated analysts have an average target of $1,209 — implying 42% upside. Four Hold ratings and one Sell round out the consensus. Even the bear case acknowledges Lilly will generate $80+ billion in revenue by 2027.
Our previous thesis centred on GLP-1 market expansion driving Lilly to $80 billion in revenue by 2028. We're now raising that estimate to $90-100 billion, driven by faster supply normalisation, stronger-than-expected Zepbound uptake, and the pipeline optionality from orforglipron and retatrutide.
At 27.5x forward earnings, Lilly is not a value stock and never will be. But the growth rate justifies the premium, the pipeline provides duration, and the manufacturing moat — $18 billion in capacity that competitors cannot replicate in less than three years — creates a structural advantage that the market undervalues. We remain buyers on any pullback below $850, with a 12-month target of $1,100-$1,200.
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