This Could Be the Best GLP-1 Stock to Buy in 2025

The GLP-1 weight loss market is a massive one, with some analysts expecting it to be worth around $200 billion by 2031. Hype around weight loss drugs isn't new, but when people are losing more than 20% of their body weight, it creates considerable enthusiasm. And by sharing their results on social media, people are amping up that excitement to a whole new level.

But to own a top drugmaker like Eli Lilly, which has an incredibly successful pair of GLP-1 drugs in Mounjaro and Zepbound, investors have to pay a significant premium -- 75 times its trailing earnings. That may be a bit steep given how competitive the GLP-1 market could become, as many healthcare companies are vying for a piece of that massive pie.

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If you're looking for a more reasonably priced investment, you may want to consider Amgen (NASDAQ: AMGN). Here's why I think it can be the best GLP-1 stock to buy this year.

Amgen's weight loss drug only needs to be taken once a month

The top GLP-1 treatments on the market today require weekly injections. But MariTide, which is Amgen's GLP-1 drug, only needs to be taken once a month. That can make it easier to stay on top of treatments. It may also result in fewer side effects, which is a key consideration for patients, as they may need to stay on their medication for the long term.

What's especially promising is that MariTide can help people lose up to 20% of their body weight after a year, per a recent phase 2 trial. While analysts were hoping to see weight loss of up to 25%, the company noted that there didn't appear to be a plateau, suggesting that greater weight loss may be achieved over a longer time frame. And in that study, many people took it less frequently than once a month, which may also have contributed to the slightly underwhelming trial results.

But focusing just on weight loss numbers could be a mistake for investors. It's also important how well patients tolerate these drugs -- and by requiring fewer injections, MariTide could be a much easier weight loss treatment to maintain over the long haul.

Despite the promising results, the stock remains cheap

There's hope that MariTide could be the real deal, and take away market share from other GLP-1 drugs in the future. But investors don't appear to be pricing in that potential. Amgen's stock is trading at 41 times its trailing earnings and just 15 times its expected future earnings (based on analyst estimates).

That's a potential steal. The average stock in the Health Care Select Sector SPDR Fund trades at a multiple of just under 18 times its future profits. In the past 12 months, Amgen's stock has risen by only 8%, as investors don't appear to be overly enthusiastic about its prospects, despite its potential in the GLP-1 drug market.

Not only is it cheap, but it's also a fairly safe investment to hang on to now. Amgen has a diversified portfolio of drugs, several of which generated more than 30% revenue growth (year over year) in the fourth quarter of 2024. Last year, the company also generated $10.4 billion in free cash flow, which is sufficient to cover its dividend payments of $4.8 billion while leaving plenty of money to reinvest in its operations and pay down its debt.

Amgen is a solid stock which could be due for a big rally

When Amgen released its recent trial results for MariTide in November and they came in below analysts' expectations, the stock fell drastically. It was an overreaction in the market, and the stock has recovered since then. But its current valuation still doesn't appear to truly price in the potential for MariTide. While the drug isn't approved yet, if it does get the green light, this can be a much more valuable business in the years ahead.

With its robust portfolio of treatments and strong financials, Amgen is one of the safer ways to invest in a company with a promising GLP-1 drug.

Should you invest $1,000 in Amgen right now?

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Amgen. The Motley Fool has a disclosure policy.