Did you know that in 2011, Eli Lilly (LLY +0.70%) reported revenue of $24.3 billion? At first glance, it may appear as though the company hasn't grown a whole lot, given that this past year its top line was $28.3 billion, just 16% higher. With numbers like that, investors might not expect to earn a good return from a stock with such underwhelming growth.
Would investing in the company a decade ago have been a good move, or would you have been better off investing in the broader markets? Below, I'll look at how much a $10,000 investment a decade ago would be worth today, and whether the stock is a buy right now.
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The company has grown over the years, but not in a straight line
In some respects, not a whole lot may have changed with respect to revenue for Eli Lilly. A decade ago, there were six drugs in its portfolio that generated more than $1 billion in sales. That includes the schizophrenia drug Zyprexa, which was its top-selling product with sales of $4.6 billion. Anti-depressant medication Cymbalta wasn't far behind with $4.2 billion in revenue in 2011. Both of those drugs still generate revenue for Eli Lilly today, but losses of exclusivity have hurt their sales; in 2021, they combined for barely over $1 billion in revenue.
Unsurprisingly, Eli Lilly's sales over the past decade have fluctuated, although the trajectory has been strong in recent years.
LLY Revenue (Annual) data by YCharts
New top-performing drugs Trulicity and Humalog, together generating close to $9 billion in sales last year, have taken the place of Zyprexa and Cymbalta for the company. Eli Lilly's ability to supplement the lost revenue with new drugs is a testament to the adaptability and strength of its business. And that's why despite the seemingly disappointing sales growth numbers, the company has actually done a great job of growing its business. Buying the stock 10 years ago would have been a great move for investors.
Here's how much a $10,000 investment would be worth today
Over the past decade, Eli Lilly has been a top healthcare stock to own. While the S&P 500 has risen by 216% during that time, Eli Lilly has dwarfed it with returns of 665%. And that's without factoring in dividends -- the stock currently yields 1.2%, which is slightly below the S&P 500 average of roughly 1.4%.
Today, that $10,000 investment would be worth more than $76,000. And if you include the dividend, here's how the total returns would compare to the market:
LLY Total Return Level data by YCharts
Can Eli Lilly continue to be a market-beating stock?
A stock's history can't predict its future. But it is useful in looking back to see how the company has evolved and transitioned from drugs that were losing exclusivity and its ability to replace them. Today, it's Trulicity that investors are worried about, as it faces a loss of exclusivity in the U.S. market by 2027.
NYSE: LLY
Key Data Points
But given the company's ability to develop drugs and continue growing, investors shouldn't panic. The company recently obtained approval from the U.S. Food and Drug Administration for its diabetes treatment, Mounjaro. And while it isn't approved as a weight-loss treatment, the drug shows incredible potential there and could be a game-changer for Eli Lilly's future. There's also its investigational Alzheimer's drug, donanemab, which shows promise. It could be a possible alternative to Biogen's highly controversial treatment, Aduhelm.
Eli Lilly's business looks to be in fine shape today. Although the stock might not replicate the incredibly impressive returns it generated over the past 10 years, it still has the potential to continue beating the market for the foreseeable future.
