Mary Lynne Hedley, Board Member at Eli Lilly LLY, reported an insider buy on November 20, according to a new SEC filing.

What Happened: Hedley’s recent purchase of 315 shares of Eli Lilly, disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday, reflects confidence in the company’s potential. The total transaction value is $229,916.

The latest update on Thursday morning shows Eli Lilly shares down by 1.56%, trading at $741.66.

Discovering Eli Lilly: A Closer Look

Eli Lilly is a drug firm with a focus on neuroscience, cardiometabolic, cancer, and immunology. Lilly’s key products include Verzenio for cancer; Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for cardiometabolic; and Taltz and Olumiant for immunology.

Breaking Down Eli Lilly’s Financial Performance

Revenue Growth: Eli Lilly’s remarkable performance in 3 months is evident. As of 30 September, 2024, the company achieved an impressive revenue growth rate of 20.43%. This signifies a substantial increase in the company’s top-line earnings. When compared to others in the Health Care sector, the company excelled with a growth rate higher than the average among peers.

Profitability Metrics: Unlocking Value

• Gross Margin: Achieving a high gross margin of 81.02%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Eli Lilly’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 1.08.

Debt Management: Eli Lilly’s debt-to-equity ratio surpasses industry norms, standing at 2.19. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 81.19, Eli Lilly’s stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: The current P/S ratio of 16.67 is above industry norms, reflecting an elevated valuation for Eli Lilly’s stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio 59.36 is above the industry average, suggesting that the market values the company more highly for each unit of EBITDA. This could be attributed to factors such as strong growth prospects or superior operational efficiency.

Market Capitalization Highlights: Above the industry average, the company’s market capitalization signifies a significant scale, indicating strong confidence and market prominence.

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Understanding the Significance of Insider Transactions

In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.

In legal terms, an “insider” refers to any officer, director, or beneficial owner of more than ten percent of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Understanding Crucial Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.

Check Out The Full List Of Eli Lilly’s Insider Trades.

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This article was generated by Benzinga’s automated content engine and reviewed by an editor.