Eli Lilly (LLY) Stock: Shares Tumble 10% Despite 45% Revenue Surge in Q1 2025

TLDR

Q1 revenue soared 45% to $12.73B, beating estimates. EPS of $3.34 missed expectations by 5%. Shares fell 10% to $804.83 after the report. Oncology sales rose 7.6%, but key drugs underperformed. CEO flagged tariff risks but touted $27B U.S. investment plan.

Eli Lilly (NYSE: LLY) shares plunged 10.5% to $804.83 in midday trading after investors reacted sharply to a mixed Q1 2025 report. Revenue surged 45.2% year over year to $12.73 billion, topping Wall Street’s estimate of $12.62 billion. However, earnings per share came in at $3.34, missing the $3.52 consensus by 5.1%.

Eli Lilly (LLY) 

The stock’s steep drop erased recent gains, though Lilly is still up 4.5% year to date, outperforming the S&P 500’s 4.5% decline.

Key Drugs Underwhelm Analysts

Despite the impressive top-line growth, several of Lilly’s key drugs fell short of analyst targets. U.S. sales of Verzenio reached $657.6 million, well below the $720.6 million estimate, though up 3% year over year. Diabetes drugs Humalog and Humulin both posted declines, missing consensus forecasts by wide margins.

Humalog U.S. sales fell 1% to $335.1 million. Humulin sales plunged 16% to $173.2 million. Oncology sales rose 7.6% to $1.95 billion but missed the $2.07 billion estimate.

On the bright side, neuroscience revenues climbed 16%, and osteoporosis drug Forteo beat expectations with 8.7% growth. However, revenue from legacy cancer drug Alimta dropped a steep 59%.

CEO Addresses Looming Pharmaceutical Tariffs

On the earnings call, CEO Dave Ricks tackled concerns over potential pharmaceutical tariffs tied to national security. The Biden administration’s ongoing Section 232 investigation could result in tariffs on imported essential drugs, many of which are produced in India and China.

Ricks signaled Lilly’s willingness to help “respond” by expanding U.S. manufacturing but questioned whether tariffs are the best solution. Lilly has already committed at least $27 billion to build four new domestic production sites, part of a broader industry trend of reshoring supply chains amid tariff threats.

Eli Lilly CEO says company can help 'respond' to national security concerns around essential drugs as tariffs loom https://t.co/4Ru4WqL3i5

— CNBC (@CNBC) May 1, 2025

“The threat of tariffs is already bringing back critical supply chains,” Ricks said, adding that Lilly would prefer lower domestic tax rates over new levies.

Long-Term Returns Still Strong

Despite today’s steep drop, Lilly has been a long-term winner. Over the past three years, the stock has delivered a 183% return, far outpacing the S&P 500’s 36%. Its five-year return stands at an eye-popping 457%, reflecting investor enthusiasm over its obesity and diabetes drug pipeline.

Conclusion

Lilly’s Q1 revenue growth underscores the company’s robust drug portfolio and expansion in key areas like oncology and neuroscience. But EPS shortfalls and weak performances from cornerstone drugs spooked investors, sending shares sharply lower. Meanwhile, looming tariffs and regulatory uncertainty around drug imports add another layer of complexity. Still, with hefty U.S. investments and a deep pipeline, Lilly remains a heavyweight in pharma, albeit facing near-term bumps.

 

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