GILD  Gilead Sciences Inc.

Exchange

NASDAQ

Sector

Health Care

Industry

Biotechnology: Biological Products (No Diagnostic Substances)

Market Cap.

84.28B

Vuru Grade

92.50/100

Current Price

$64.50
-0.06 (-0.09%)

Growth Price

$158.07
Undervalued by 145.07%

Stability Price

$45.54
Overvalued by 29.39%

Company Metrics

  • P/E 6.82
  • P/S 2.9
  • P/B 4.13
  • EPS 9.46
  • Cash ROIC 44.12%
  • Cash Ratio 1.29
  • Dividend 2.08 / 3.22%
  • Avg. Vol. 7.80M
  • Shares 1.31B
  • Market Cap. 84.28B

Company Description

Gilead Sciences, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide. Its products include Atripla, Truvada, Viread, Emtriva for the treatment of human immunodeficiency virus infection in adults; Hepsera, an oral formulation for the treatment of chronic hepatitis B; AmBisome, a amph... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

7 Things You Didn't Know About Gilead Sciences, Inc.
Motley Fool - May 28, 2017
Gilead Sciences (NASDAQ:GILD) is known for several things. It's a leader in developing HIV drugs such as Truvada and Genvoya.
3 Reasons Gilead Sciences, Inc. Is a Better Dividend Stock Than Amgen, Inc.
Motley Fool - May 24, 2017
Over the past few years, though, Amgen, Inc. (NASDAQ:AMGN) and Gilead Sciences, Inc. (NASDAQ:GILD) have risen in prominence as attractive alternatives for dividend-seeking investors.
Gilead Is An Undervalued Dividend Machine - Seeking Alpha
Clark Estates Inc. NY Raises Stake in Gilead Sciences, Inc. (GILD) - The Cerbat Gem
Gilead: Taking The Other Side Of The Bet
Seeking Alpha - May 25, 2017
Today I read an article by Giovanni DiMauro here on Seeking Alpha, in which he proposes buying call options on Gilead (NASDAQ:GILD) in order to get the chance for a very big return in a small time frame.
Better Buy: Gilead Sciences, Inc. vs. Amgen Inc.
Motley Fool - May 14, 2017
For much of the past five years, Gilead Sciences (NASDAQ:GILD) was a bigger biotech than Amgen (NASDAQ:AMGN) in terms of market cap.
Gilead Sciences Is All About The Cash - Seeking Alpha
Gilead Sciences, Inc. (GILD) Downgraded by Vetr Inc. - The Cerbat Gem
Gilead: A Great Opportunity In Gilead For Contrarian Investors
Seeking Alpha - May 23, 2017
As of 2017 Q1 Gilead had total adjusted debt of $26.53B with $34.0B of cash and marketable securities, meaning a net cash position of approximately $7.5B.
Better Buy: Gilead Sciences, Inc. vs. Johnson & Johnson
Motley Fool - May 5, 2017
In terms of free cash flow, Gilead Sciences actually beat J&J last year and the year before largely due to exploding sales of its hepatitis C virus (HCV) treatments.
Gilead: An Honest Post Earnings Assessment - Seeking Alpha
Gilead Sciences, Inc. (GILD) Continues to Fail, But the Stock Remains Cheap - Smarter Analyst
Gilead Sciences: For The Enterprising Investor
Seeking Alpha - May 15, 2017
As long term and recent shareholders are well aware, this has had a very negative impact on the share price. Despite declining revenues from HCV sales, we believe that the company will eventually succeed in diversifying itself and finding new revenue ...
I Still Can't Believe Gilead Sciences, Inc. Spent $14.8 Billion on Shareholder ...
Motley Fool - May 9, 2017
Over the past sixteen months, Gilead Sciences (NASDAQ:GILD) has doled out $11.565 billion on share repurchases and $3.187 billion on dividends, for a grand total of $14.75 billion on shareholder rewards.
The Chart Is Speaking Loud And Clear For Gilead Sciences, Inc. (GILD) - NY Stock News
Palo Alto Investors LLC Has $22801000 Position in Gilead Sciences, Inc. (GILD) - The Cerbat Gem
Gilead Sciences Inc.'s Revenue and Earnings Continue to Fall on Declining HCV ...
Motley Fool - May 2, 2017
That was the question investors were asking in the days leading up to Gilead Sciences' (NASDAQ:GILD) announcement of its first-quarter 2017 results.
Gilead Sciences Drops as Sales of Top-Selling Drugs Fall Short - Bloomberg
Gilead Sciences: No Reason To Panic - Seeking Alpha
Woodford Investment Management LLP Buys Gilead Sciences Inc, Bioverativ Inc ...
Nasdaq - May 22, 2017
Woodford Investment Management LLP added to the holdings in Gilead Sciences Inc by 158.52%. The purchase prices were between $65.59 and $76.38, with an estimated average price of $70.32.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for GILD to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate GILD's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$64.50 Current Price

$158.07 Growth Price (DCF)

Undervalued by 145.07%


Growth Rate Assumed by Market: -11.93%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$45.54 Stability Price (EPV)

Overvalued by 29.39%


Discount Rate: 15.0%

$143.08 Book Price

Undervalued by 121.82%


Varying Cash Return on Invested Capital over the past 5 years

GILD has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

GILD has created $44.12 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 2.80B 2.91B 12.26B 19.58B 15.92B
divided by
Invested Capital 15.11B 14.04B 18.78B 27.34B 35.86B
Cash ROIC 18.52% 20.76% 65.30% 71.62% 44.39%

Varying Return on Equity over the past 5 years

GILD has generated strong profits with money shareholders have invested. However, there is a substantial variation in their Return on Equity from year-to-year. This may reflect management's inability to generate consistent returns or may be caused by one-time events. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

GILD has generated $60.36 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 2.57B 3.06B 12.06B 18.11B 13.49B
divided by
Stockholders' Equity 9.31B 11.37B 15.43B 18.53B 18.89B
Return on Equity 27.64% 26.89% 78.17% 97.69% 71.41%

Excellent Business Performance over the past 10 years

GILD has been able to maintain profitability in good times and bad. This could mean GILD has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

GILD has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 1.69B 2.09B 2.85B 2.77B 3.51B 2.80B 2.91B 12.26B 19.58B 15.92B

Weak Balance Sheet

GILD's financial position is not ideal. The key is to check whether GILD is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 1.17B 1.79B 1.66B 2.10B 9.90B 1.86B 2.13B 10.13B 14.61B 11.90B
Current Assets 3.03B 4.30B 4.81B 5.71B 13.92B 6.16B 7.27B 17.71B 24.76B 20.45B
Total Assets 5.83B 7.02B 9.70B 11.59B 17.30B 21.24B 22.50B 34.66B 51.84B 56.98B
Current Liabilities 736.28M 1.22B 1.87B 2.46B 2.51B 4.27B 6.33B 5.76B 9.89B 9.22B
Total Liabilities 2.37B 2.87B 3.33B 5.73B 10.56B 11.93B 11.13B 19.24B 33.31B 38.09B
Stockholder' Equity 3.46B 4.15B 6.37B 5.86B 6.74B 9.31B 11.37B 15.43B 18.53B 18.89B
Current Ratio 4.11 3.52 2.57 2.32 5.53 1.44 1.15 3.07 2.50 2.22
TL-to-TA 0.41 0.41 0.34 0.49 0.61 0.56 0.49 0.55 0.64 0.67

Consistent Reinvestment of Profits over the past 10 years

GILD has consistently retained profits. This may put GILD in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, GILD can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 249.08M 382.87M 2.00B 1.18B 1.78B 3.70B 6.11B 12.73B 18.00B 18.15B
Retained Earnings Growth - 53.72% 421.13% -40.67% 50.10% 108.51% 64.80% 108.54% 41.38% 0.85%

Varying Competitive Advantage over the past 10 years

GILD likely has a competitive advantage which prevents other companies from entering or competing in their industry. However, there is a substantial variation in their Net Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$38.55 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 1.62B 2.01B 2.64B 2.90B 2.80B 2.57B 3.06B 12.06B 18.11B 13.49B
divided by
Revenue 4.23B 5.34B 7.01B 7.95B 8.39B 9.70B 11.20B 24.89B 32.64B 30.39B
Net Profit Margin 38.19% 37.69% 37.59% 36.50% 33.43% 26.53% 27.29% 48.45% 55.47% 44.38%

Strong Pricing Power over the past 10 years

GILD has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$80.73 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 3.46B 4.21B 5.42B 6.08B 7.16B 7.23B 8.34B 21.10B 28.63B 26.13B
divided by
Revenue 4.23B 5.34B 7.01B 7.95B 8.39B 9.70B 11.20B 24.89B 32.64B 30.39B
Gross Margin 81.83% 78.87% 77.24% 76.48% 85.34% 74.53% 74.48% 84.78% 87.73% 85.98%

Low Capital Intensity over the past 10 years

GILD has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that GILD may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

6.21% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 78.65M 115.01M 230.06M 61.88M 131.90M 397.05M 190.78M 557.00M 747.00M 748.00M
divided by
Net Income 1.62B 2.01B 2.64B 2.90B 2.80B 2.57B 3.06B 12.06B 18.11B 13.49B
Capital Expenditure Ratio 4.87% 5.72% 8.73% 2.13% 4.70% 15.43% 6.24% 4.62% 4.13% 5.55%

No Dividend History over the past 10 years

GILD has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 964.36M 958.83M 934.11M 873.40M 790.12M 3.17B 1.69B 1.65B 1.52B 1.36B
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 46.33 51.33 43.80 36.26 40.93 72.38 75.08 95.30 102.16 71.61
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

GILD has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 964.36M 958.83M 934.11M 873.40M 790.12M 3.17B 1.69B 1.65B 1.52B 1.36B
Stock Bought Back - 0.58% 2.65% 6.95% 10.54% -75.04% 86.76% 2.90% 8.28% 12.00%
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Discussion
Sort By:
1
Posted by pbanik  (on January 29, 2017)
1
Posted by pbanik  (on October 15, 2014)
Deutsche Bank Says Gilead Sciences Stock Reaction Is Overdone
http://www.benzinga.com/analyst-ratings/analyst-color/14/10/4921188/deutsche-bank-says-gilead-sciences-stock-reaction-is-ove

Key stats and ratios
Q2 (Jun '14) 2013
Net profit margin 55.86% 27.29%
Operating margin 67.53% 40.39%
EBITD margin - 43.46%
Return on average assets 49.40% 13.98%
Return on average equity 99.48% 29.75%
Employees 6,100 -
CDP Score
https://www.google.ca/finance?q=gild&ei=avQ9VImFNaauiAKi_ICICQ








- -
1
Posted by tmuscat27  (on April 8, 2013)
you forgot the reason as to why the hep c will not be a winner.
tx tm
1
Posted by Alexleroi  (on February 2, 2013)
Three things to consider: 1) Executive Compensation is unreasonable; 2) Directors have been there for too long, governance red flag;3) Unreasonable acquisitions.
1
Posted by miller  (on March 30, 2012)
They paid one third of their market cap for Pharmassets - $11 billion! That seems irresponsible on first glance. I can't imagine that this hepatitis C drug that Pharmassets has created will be that much of a winner.

Any thoughts?
4
Posted by gsanta111  (on April 17, 2012)
That's when I decided to sell my positions on GILD. Didn't make sense to me. Seems like a huge gamble on a single product
0
Posted by gsanta111  (on March 8, 2013)
Wow, boy was I wrong!

Btw, price is NOT $44.95.

They had a 2-for-1 stock split
So, it's actually at $89.9