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During the Mad Money episode aired on September 8, Jim Cramer highlighted Eli Lilly and Company (NYSE:LLY) as a top-tier compounder driven by its booming GLP-1 weight-loss and diabetes treatments. Comparing the pharmaceutical leader to Indianapolis Colts running back Jonathan Taylor, Cramer said:
Beyond that, I've got a couple more running backs. Eli Lilly's become a great compounder thanks to its booming GLP-1 weight loss business. For an NFL comparison, we're going to have to stay in Indianapolis where Lilly's based, and give you Colts running back Jonathan Taylor, entering his seventh season with more than 7,500 career rushing yards already under his belt. Taylor isn't going to catch anyone by surprise anymore, like Lilly. But you could probably get Taylor with a mid-to-late first-round pick, just like you can now buy Lilly at just over 30 times earnings. That's down from 45 times earnings at the beginning of the year. Both represent decent value.
Cramer's football comparison fits Eli Lilly and Company's (NYSE:LLY) current market position well. Just like a veteran running back who consistently picks up tough yards game after game, as Cramer mentioned, Eli Lilly has built a massive engine of steady growth through its breakthrough GLP-1 medications, Mounjaro and Zepbound. Together, these two blockbuster drugs generated a staggering $14.8 billion in revenue for Q2 (with Mounjaro bringing in $9.9 billion and Zepbound pulling in $4.9 billion), fueling overall company sales growth of nearly 48% year-over-year. In addition, its valuation has cooled off significantly from earlier peaks and the company's forward P/E multiple stands at roughly 24x, offering a more balanced entry point for long-term investors.
Even with a dominant lead in the obesity and diabetes treatment market (with Mounjaro bringing in $9.9 billion and Zepbound pulling in $4.9 billion), Eli Lilly and Company (NYSE:LLY) could face several hurdles. The company faces fierce competition from rivals like Novo Nordisk as both companies race to expand manufacturing capacity and develop next-generation weight-loss pills. Growing political scrutiny over drug pricing and pressure from insurance providers could also squeeze profit margins over time. Furthermore, because the stock's momentum is heavily tied to the massive success of its GLP-1 franchise, any unexpected supply chain delays or clinical trial bumps can trigger short-term pullbacks.