A moat score of 85 alongside a management score of 84 point to a business with real staying power: a 30.2% return on invested capital and an 83.8% gross margin show consistently efficient use of capital and strong pricing power, even carrying a debt to equity ratio of 1.6x.
The margin of safety score of 37 tells a different story. Against a share price of $1,214.70, every valuation method comes in far lower: the margin of safety price is $447.00, the 10-cap price is $251.35, and the payback time price is $396.77, with a consensus buy price of $447.00 as well. At 40.8 times earnings and a free cash flow yield of just 0.9%, the current price is asking a great deal from the business.
The tension sits between quality and cost. The model already capped its growth assumption at 15% against a historical rate of 22%, a deliberate act of conservatism, yet the price still stands well above every calculated buy point that conservatism produced.
| Price | $1,152.22 |
| Market cap | $1.1T |
| P/E ratio | 38.7x |
| Return on invested capital | 30.2% |
| Gross margin | 83.0% |
| Debt to equity | 1.60x |
| Free cash flow yield | 0.9% |
| Growth rate used | 15.0% |
| Growth rate measured | 22.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Mgmt | Margin of safety |
|---|---|---|---|
| Johnson & Johnson (JNJ) | 53 | 99 | 4 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Eli Lilly and Company rather than accepting ours.