2 Quality Healthcare Stocks That Could Build a Strong Foundation for Beginner Investors

Eli Lilly reported exceptional Q3 2025 results, with revenue up 54% and net income surging 475%, primarily driven by robust demand for its blockbuster weight loss and diabetes drugs, Zepbound and Mounjaro, which are projected to achieve over $60 billion in peak annual sales by 2030. The company also maintains a strong pipeline, including an oral GLP-1. Concurrently, telehealth platform Hims & Hers Health saw its H1 2025 revenue jump 90% to $1.1 billion and net income nearly quadruple, fueled by its subscription model and expansion into new specialties, despite facing regulatory scrutiny regarding its compounded GLP-1 offerings. Both companies are positioned for continued growth amid demographic shifts and evolving healthcare delivery.

Analysis

Eli Lilly (LLY) reported exceptional Q3 2025 results, with revenue surging 54% and net income increasing 475% year-over-year, significantly surpassing analyst expectations. This robust performance was primarily driven by strong demand for its incretin drugs, Mounjaro and Zepbound, which generated $6.5 billion (up 109%) and $3.6 billion (up 185%) in revenue, respectively, capturing two-thirds of new U.S. incretin prescriptions. Analysts project peak annual sales for tirzepatide, the active ingredient, to exceed $60 billion by 2030, underscoring its market dominance.

The company's pipeline remains strong, with an oral, once-daily GLP-1 pill, orforglipron, showing positive Phase 3 trial results and targeting global regulatory submissions by year-end. This oral format could significantly expand its addressable market beyond injectables. Furthermore, Eli Lilly's consistent dividend payments since the late 1800s and plans for new manufacturing facilities reinforce its financial stability and commitment to growth.

Hims & Hers Health (HIMS) demonstrated significant growth in H1 2025, with revenue jumping 90% to $1.1 billion and net income almost quadrupling to $92 million, driven by its subscription-based telehealth platform. The company is expanding into high-demand areas like hormone health and preventive care, leveraging its direct-to-consumer model to attract younger demographics. However, its strategy involving personalized GLP-1 formulations, while aiming for market expansion, operates in a legal gray area and has attracted FDA scrutiny.

The broader healthcare sector benefits from aging global populations and a shift towards digital-first solutions, positioning both LLY and HIMS to capitalize on these long-term trends. While LLY exhibits strong fundamentals and pipeline strength, HIMS presents a high-growth, digitally-native model with inherent regulatory challenges in a key product area.

Key Decisions for Investors

• For Eli Lilly (LLY), consider continued long-term growth potential given its dominant market position in incretins, robust product pipeline including oral GLP-1s, and strategic manufacturing expansions, while monitoring regulatory approvals for new treatments.
• For Hims & Hers (HIMS), evaluate the balance between its strong subscription-based revenue growth and the regulatory risks associated with its compounded GLP-1 offerings, focusing on the success of its diversification into other wellness specialties.
• Investors should assess the broader healthcare sector's demographic tailwinds and digital transformation, identifying companies well-positioned to capitalize on the increasing demand for chronic disease management and accessible care.