If You’d Dropped $1,000 on Eli Lilly (LLY) Stock 5 Years Ago, Brace Yourself for These Returns

Pharma giant Eli Lilly (LLY) just handed investors a masterclass in 'buy and hold.' Here's what happened—no fluff, just numbers.

The Setup: A $1,000 Bet in 2020

Flashback to August 2020. The world was masked up, markets were volatile, and Eli Lilly stock traded at a fraction of its current price. Fast-forward to today—anyone who parked $1,000 in LLY back then is sitting on a small fortune.

The Punchline: Compound Growth Wins

No crystal ball needed. Lilly's diabetes and obesity drugs exploded in demand, turning the stock into a Wall Street darling. Exact returns? Let's just say it outperformed 92% of S&P 500 stocks—because boring pharma sometimes delivers blockbuster drama.

The Cynical Kick: Timing > Talent

Sure, hindsight is 20/20. But while traders were chasing meme stocks, Lilly shareholders quietly raked it in. Moral of the story? In markets, luck often dresses up as skill.

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Eli Lilly has been a big winner and could still be a good long-term play

Over the past five years, Eli Lilly stock has risen roughly 320% as of market close Aug. 11. Meanwhile, the company has delivered a dividend-adjusted total return of roughly 347% over the last five years. After factoring in the added benefits of the company's dividend, a $1,000 investment made in Eli Lilly stock would now be worth roughly $4,472.

Eli Lilly's recent stock pullback stems from relatively disappointing trial data for its orally administered Orforglipron weight loss drug. Orforglipron proved to be more effective than the placebo benchmark over the 18-month trial period, but clinical data suggested that it was significantly less effective than the company's injected Zepbound treatment. On the other hand, the company still looks to have a strong position in the obesity treatment market even if it takes some time to make progress with the efficacy of orally administered treatments.

Following Eli Lilly's strong sales and earnings results in the second quarter and raising its full-year sales guidance from between $58 billion and $61 billion to between $60 billion and $62 billion, the stock deserves a close look from long-term investors right now. While the stock could continue to see valuation volatility in conjunction with the outlook for its weight loss drug pipeline, the recent pullback could be a buying opportunity.