Eli Lilly and Company (LLY) Slid Despite Strong Top-Line Growth

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” Q2 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets surged in the second quarter, with the S&P 500 Total Return Index rising 10.94% and the Russell 1000 Growth Index returning 17.84%. The fund also surged in the quarter and returned 15.01%. Continued enthusiasm for artificial intelligence, better-than-expected earnings in several large-cap growth sectors, and improving macroeconomic conditions lifted the markets in the quarter. Growth-focused stocks took the lead once more, with the strongest performance coming from sectors like technology, communication services, and certain areas of consumer discretionary. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, RiverPark Large Growth Fund highlighted stocks such as Eli Lilly and Company (NYSE:LLY). Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company headquartered in Indianapolis, Indiana. The one-month return of Eli Lilly and Company (NYSE:LLY) was -2.35%, and its shares lost 5.24% of their value over the last 52 weeks. On August 1, 2025, Eli Lilly and Company (NYSE:LLY) stock closed at $762.33 per share, with a market capitalization of $684.371 billion.

RiverPark Large Growth Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its second quarter 2025 investor letter:

"Eli Lilly and Company (NYSE:LLY): LLY shares declined during the quarter despite strong top-line growth, as the company missed earnings expectations and faced heightened scrutiny around GLP-1 pricing dynamics. In Q2, Mounjaro sales rose sharply to $3.8 billion and Zepbound reached $2.3 billion in revenue. However, EPS came in below consensus due to lower pricing and temporary supply disruptions.

The market reacted to news that certain payers were shifting GLP-1 drugs off preferred formularies (insurance companys’ lists of approved drugs), raising concerns about future prescription growth. While the underlying demand remains robust, competitive dynamics and manufacturing constraints led to investor caution. Volatility in the broader weight-loss drug space also contributed to relative weakness.

Despite short-term pricing concerns, we believe Lilly is well positioned for multi-year growth. Its leadership in obesity and diabetes treatments, combined with a promising late-stage pipeline in Alzheimer’s, immunology, and oncology, offers significant upside."

li Lilly and Company (NYSE:LLY) is in 21st position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 119 hedge fund portfolios held Eli Lilly and Company (NYSE:LLY) at the end of the first quarter, which was 115 in the previous quarter. Eli Lilly and Company (NYSE:LLY) reported strong results in first quarter of 2025, with revenue increasing 45% compared to Q1 2024. While we acknowledge the potential of Eli Lilly and Company (NYSE:LLY) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Eli Lilly and Company (NYSE:LLY) and shared Baron Health Care Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.