Shares of Eli Lilly (NYSE: LLY) jumped as much as 5.1% on Tuesday. However, as of 11:37 a.m. ET, the big pharma stock was down by 0.5%.
The initial spike came after Lilly announced its 2023 fourth-quarter and full-year results. The company reported Q4 revenue of $9.35 billion, up 28% year over year. This result came in well above the average analysts' revenue estimate of $8.93 billion.
Lilly posted Q4 earnings of $2.19 billion, or $2.42 per share, based on generally accepted accounting principles (GAAP). Its non-GAAP (adjusted) earnings in the quarter were $2.25 billion, or $2.49 per share. The consensus Wall Street estimate was for non-GAAP earnings of $2.22 per share.
Was there anything investors didn't like with Lilly's update?
Since Lilly gave up its solid gain from earlier Tuesday morning, you might wonder if there was something investors didn't like in the company's Q4 update. That didn't appear to be the case.
No one could complain about Lilly's most talked-about growth drivers, type 2 diabetes drug Mounjaro and its sibling product, weight loss drug Zepbound. The company also had six other drugs with double-digit percentage sales growth in Q4: Verzenio, Taltz, Jardiance, Olumiant, Tyvyt, and Retevmo.
Lilly provided full-year 2024 revenue guidance of between $40.4 billion and $41.6 billion. This midpoint of this range reflects year-over-year growth of nearly 21%. It also is higher than the average analysts' revenue estimate of $39.4 billion.
Is Lilly a good stock to buy now?
I wouldn't make too much of Lilly's gyrations on Tuesday. Big spikes sometimes are followed by immediate sell-offs. None of it matters over the long run.
Is Lilly a good stock to buy now for long-term investors? I think so. The company has a massive growth runway with Mounjaro and Zepbound. It could soon win U.S. regulatory approval for experimental Alzheimer's disease drug donanemab. Although Lilly's valuation might look steep at first glance, its growth prospects justify a premium price, in my view.
Should you invest $1,000 in Eli Lilly right now?
Before you buy stock in Eli Lilly, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of February 6, 2024
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
