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Eli Lilly Stock Is On Track for Its Worst Performance Since 2008. Should Investors Be Worried?
Key Points
Eli Lilly reported strong earnings for the second quarter, beating on the top and bottom lines.
Disappointing trial results for orforglipron led to a sharp crash in its share price on Thursday.
The stock hasn't been trading this low since early 2024.
Eli Lilly (NYSE: LLY) stock is down big this year. It has lost 17% of its value thus far in 2025 (returns as of Aug. 7). It's not usual territory for the top healthcare stock to be in, given the tremendous growth it has achieved in recent years. On Thursday, the stock crashed 14% after reporting its recent earnings numbers, despite them seemingly looking strong.
The stock is struggling badly, and if things don't improve in short order, Eli Lilly will be on track for its worst performance since 2008. Is the company in big trouble, or could this actually be a great time to invest in the healthcare stock, with it recently hitting a new 52-week low?
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Earnings disappointment, despite guidance raise
On Thursday, Eli Lilly reported its second-quarter numbers for 2025. For the period ending June 30, its sales rose by 38% to $15.6 billion, which was better than what analysts were projecting -- $14.7 billion. Net income nearly doubled, rising by 91% to $5.7 billion. Its adjusted per-share profit of $6.31 came in better than Wall Street estimates of $5.57.
The company boosted its guidance for the year on both the top and bottom lines, but it cautioned that those estimates did not factor in the effect that tariffs on imported pharmaceuticals may have on its business. Another factor which weighed on the stock was trial data on the company's obesity pill, orforglipron. On the highest dose, patients lost over 12% of their body weight, which wasn't as much as analysts were expecting. Given that people using the company's GLP-1 weight loss drug, Zepbound, can lose over 25% of their body weight, investors may be worried that Eli Lilly's future growth may not be as promising as it may have looked before.
Eli Lilly stock hasn't been performing this badly since the Great Recession
Prior to Thursday's sell-off, the stock was on track for its worst year since 2016. But after the underwhelming news from the orforglipron trial, the stock is now looking like it may do worse than the near 13% decline it incurred in 2016. It could now be headed for its worst performance since the Great Recession, in 2008, when its shares fell by almost 25%.
| Year | S&P 500 Return | Eli Lilly Stock Return |
|---|---|---|
| 2024 | 23.31% | 32.44% |
| 2023 | 24.23% | 59.34% |
| 2022 | -19.44% | 32.45% |
| 2021 | 26.89% | 63.60% |
| 2020 | 16.26% | 28.46% |
| 2019 | 28.88% | 13.58% |
| 2018 | -6.24% | 37.01% |
| 2017 | 19.42% | 14.83% |
| 2016 | 9.54% | -12.71% |
| 2015 | -0.73% | 22.13% |
| 2014 | 11.39% | 35.27% |
| 2013 | 29.60% | 3.41% |
| 2012 | 13.41% | 18.67% |
| 2011 | 0.00% | 18.61% |
| 2010 | 12.78% | -1.88% |
| 2009 | 23.45% | -11.32% |
| 2008 | -38.49% | -24.57% |
Table by author. Data source: YCharts.
Eli Lilly's stock highlights one of the big risks with investing in a stock that's trading at a high valuation -- expectations are also elevated. It's normally trading at over 60 times earnings and sometimes even more than 100 times its trailing profits. Investors have been paying a big premium for Eli Lilly because of the expectation that it will achieve even more growth in the years ahead, due to its promising GLP-1 drugs. When news came that orforglipron perhaps wouldn't be as good as expected, the stock nosedived.
Should you buy Eli Lilly stock right now?
Eli Lilly is a top healthcare company to invest in for the long haul, and I think that as long as you aren't in a rush to turn a quick profit, it can make for an excellent buy. Unfortunately, the market can sometimes be fickle and react strongly to any kind of negative developments. But the fact remains that Eli Lilly is a leader in the GLP-1 space and its business isn't dependent on just a single drug. It's working on getting bigger and developing more products. Poor trial results from orforglipron may be disappointing, but they shouldn't deter you from investing in what's still an excellent business overall.
Shares of Eli Lilly haven't been this low since early 2024, and now may be a great time to invest in the business for the long haul.
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David Jagielski 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.