After pre-announcing that its full-year revenue would come in below its original guidance, Eli Lilly (LLY 0.92%) announced its full results and reiterated its earlier 2025 forecast. The company has been a big beneficiary of GLP-1 drugs that have seen soaring demand as they have been shown to greatly help with multiple health issues, including weight control.

The stock has bounced back since lowering its 2024 guidance in mid-January and is now up more than 10% year to date.

Let's take a closer look at the company's results to see if the stock is a buy.

GLP-1 drugs power growth

After reducing its guidance last month, Eli Lilly's revenue came pretty much in line with its lowered expectations. In January, the company lowered its 2024 revenue forecast from a range of $45.4 billion to $46 billion to a new outlook of $45 billion, with fourth-quarter revenue projected to be about $13.5 billion. For the quarter, it saw its revenue climb 45% to $13.53 billion, while revenue for the full year jumped 32% to $45.04 billion.

Lilly's growth was led by its GLP-1 drugs. For the quarter, revenue for Mounjaro soared 60% year over year to $3.5 billion, while revenue for Zepbound surged from $175.8 million to $1.9 billion. Both Mounjaro and Zepbound have the same active ingredient in tirzepatide and are commonly used to help people lose weight, often through off-label prescriptions. However, they are approved by the Food and Drug Administration (FDA) for different uses. Mounjaro is approved to help improve blood glucose levels in adults with type 2 diabetes, while Zepbound is approved for weight loss in obese adults or overweight adults with at least one weight-related condition, such as high cholesterol or high blood pressure.

Liily's older GLP-1 drug, Trulicity, meanwhile, continues to see its revenue sink as patients move to its newer GLP-1 drugs. Revenue fell 25% in the quarter to $1.3 billion.

However, Lilly saw strength in other drugs as well, with overall non-incretin revenue growing 20%. Verzenio, which is used to treat HR+, HER2– breast cancer that has spread to other parts of the body, saw sales climb 36% to $1.6 billion. Diabetes medications Jardiance and Humalog saw sales jump 50% and 69% to $1.2 billion and $620 million, respectively. Meanwhile, the autoimmune drug Taltz saw revenue rise 21% to $952 million.

Source: Eli Lilly.

Lilly's U.S. revenue jumped 40% to $9 billion, while international revenue climbed 55% to $4.5 billion. Gross margins, meanwhile, rose 130 basis points to 82.2%.

Adjusted earnings per share (EPS) soared, more than doubling to $5.32. That was well ahead of analyst exceptions for EPS of $4.95 as compiled by LSEG.

Looking ahead, the company reiterated the 2025 forecast it gave last month. It is projecting 2025 revenue to range between $58 billion to $61 billion, representing growth between 29% to 36%. It is looking for full-year adjusted EPS to come in between $22.50 and $24.

The growth is expected to be led by continued GLP-1 drug usage in the U.S. as well as the launch of Mounjaro in new international markets. The company is expected to have 1.6 times as many incretin saleable doses in the first half of this year compared to last year, and it expects its new Concord facility to begin shipping medicine this year. It is also looking to expand commercial access to its GLP-1 drugs and expects improvements in 2025, particularly with Medicare and Medicaid.

It is also seeing solid progress with the launches of Kisunla, a treatment for early Alzheimer's, and ezcema medication Ebglyss. Further out, the company is looking for a full-scale launch of Orforglipron in 2026. Orforglipron is an oral GLP-1 drug that can be used for weight loss. Today, most GLP-1 drugs are injectable.

Image source: Getty Images.

Is Eli Lilly stock a buy?

Despite the earlier guidance reduction, Lilly is very well positioned. The company has some of the leading GLP-1 weight-loss drugs on the market, and the introduction of an oral GLP-1 drug in 2026 could be another game-changer. Meanwhile, its other non-GLP-1 drugs are also doing well.

With the misstep in projecting Q4 revenue behind it, the company's 2025 guidance looks to potentially be pretty conservative. The miss in the quarter was largely due to Lilly projecting that patients would double up on some scripts in December, which did not materialize. These assumptions are not in guidance for next year, nor is the possibility it could have more GLP-1 capacity in the second half.

From a valuation perspective, Lilly trades at a forward price-to-earnings (P/E) ratio of 37 times 2025 analyst estimates but has a price/earnings-to-growth (PEG) ratio of under 0.4. PEGs below 1 are typically considered undervalued, so on that basis, the stock is attractively valued.

LLY PE Ratio (Forward) data by YCharts.

Given the popularity of GLP-1 drugs and the potential for an oral GLP-1 drug launch in 2026, Lilly remains very well positioned. As such, I think the stock still looks attractive at current levels.