Eli Lilly and Company (LLY): investment thesis checklist
What a value investor writing down why they own Eli Lilly and Company would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 33.8% in FY2025; between 16.4% and 33.8% over 8 filed years, median 26.1%. Does the thesis need it to stay inside that range?
- Return on equity: 77.8% in FY2025; between -1.8% and 319.1% over 10 filed years, median 60.4%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 0.9% in FY2025; between 0.1% and 5.1% over 10 filed years, median 2.7%. Does the thesis need it to stay inside that range?
- EV to EBIT: 37.67x in FY2025; between 22.09x and 78.14x over 8 filed years, median 39.28x. Does the thesis need it to stay inside that range?
- Price to earnings: 46.83x in FY2025; between 14.78x and 100.50x over 9 filed years, median 45.13x. Does the thesis need it to stay inside that range?
- Gross margin: 83.0% in FY2025; between 73.1% and 83.0% over 10 filed years, median 78.0%. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 21.6% in FY2025; between -2.7% and 21.6% over 10 filed years, median 5.1%. Does the thesis need it to stay inside that range?
- Share count change: -0.5% in FY2025; between -9.5% and 0.1% over 10 filed years, median -0.8%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Eli Lilly and Company's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 2.06x
Today 1.65x. Replayed over 8 filed years, it would have broken in 4; most recently FY2024, at 2.44x (10-K, filed 2025-02-19).
Revenue Growth 1Y stays at or above 0%
Today 44.7%. Replayed over 9 filed years, it would have broken in 1; most recently FY2017, at -5.88% (10-K, filed 2018-02-20).
Return on Invested Capital stays at or above 27.1%
Today 33.83%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which debt to equity rose above 2.06x.
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which return on invested capital fell below 27.1%.
4. The published tests it meets today
Of 30 tests value investors published: 2 met, 27 not met, 1 we could not complete. Counts, never a score.
Meets: ROIC at or above WACC; Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.