Eli Lilly and Company (LLY): A Bull Case Theory

We came across a bullish thesis on Eli Lilly and Company on Kontra Investments’s Substack by Kontra. In this article, we will summarize the bulls’ thesis on LLY. Eli Lilly and Company's share was trading at $724.54 as of September 26th. LLY’s trailing and forward P/E were 47.36 and 24.04 respectively according to Yahoo Finance.

Few companies have captured investor attention like Eli Lilly, which has emerged as the leader in the obesity treatment megatrend, powered by its injectable therapies Mounjaro and Zepbound. The recent Phase 3 ATTAIN-2 trial of orforglipron, Lilly’s oral GLP-1 candidate, represents a pivotal milestone, demonstrating 10.5% total weight loss at 72 weeks in patients with obesity and type 2 diabetes—comparable to semaglutide—while offering the convenience of an oral pill.

This validates orforglipron’s clinical profile and significantly expands the commercial opportunity beyond Lilly’s injectables, as oral formulations are expected to drive broader adoption in primary care and capture patients reluctant to initiate injections. Strategically, orforglipron complements Lilly’s existing portfolio, creating a full-spectrum treatment ecosystem from oral to injectable therapies, strengthening patient retention and market share. The company’s broader obesity strategy emphasizes depth with highly effective twincretins, breadth with oral and pipeline assets, and durability through substantial manufacturing investments.

Recent prescription trends show Lilly maintaining leadership in obesity therapies, with Zepbound prescriptions growing and starter doses stabilizing after formulary shifts, highlighting a competitive but sustainable environment. Despite trading at premium multiples of 22–23x forward earnings, valuation is supported by strong projected revenue growth, expanding gross margins, high returns on invested capital, and accelerating cash flow, with net debt expected to turn into net cash by 2026.

Risks include pricing pressures, manufacturing bottlenecks, and pipeline uncertainties, but the validated orforglipron launch and layered portfolio enhance long-term growth visibility. Overall, Lilly’s strategic positioning in obesity, coupled with a diversified, durable portfolio, positions the company for sustained double-digit growth, offering compelling long-term investment potential.

Previously we covered a bullish thesis on Eli Lilly and Company (LLY) by Kontra in May 2025, which highlighted the company’s leadership in obesity and diabetes therapeutics, strong revenue growth from Mounjaro and Zepbound, and near-term pipeline catalysts. The company's stock price has depreciated approximately by 8.75% since our coverage. The thesis still stands as Lilly’s long-term growth remains robust. Kontra shares a similar perspective but emphasizes the ATTAIN-2 results for orforglipron, highlighting the strategic value of oral GLP-1s in expanding adoption and strengthening Lilly’s obesity portfolio.

Eli Lilly and Company is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 119 hedge fund portfolios held LLY at the end of the second quarter which was 119 in the previous quarter. While we acknowledge the potential of 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.

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Disclosure: None.