GILD  Gilead Sciences Inc.

Exchange

NASDAQ

Sector

Health Care

Industry

Biotechnology: Biological Products (No Diagnostic Substances)

Market Cap.

89.60B

Vuru Grade

92.50/100

Current Price

$68.55
-0.03 (-0.04%)

Growth Price

$158.02
Undervalued by 130.52%

Stability Price

$45.53
Overvalued by 33.58%

Company Metrics

  • P/E 6.9
  • P/S 2.95
  • P/B 4.76
  • EPS 9.94
  • Cash ROIC 44.12%
  • Cash Ratio 1.29
  • Dividend 2.08 / 3.05%
  • Avg. Vol. 9.70M
  • Shares 1.31B
  • Market Cap. 89.60B

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

3 Things to Watch With Gilead Sciences, Inc. Q1 Results
Motley Fool - 7 hours ago
Don't expect good news when Gilead Sciences (NASDAQ:GILD) announces its first-quarter results on May 2. The big biotech has already set expectations quite low for 2017.
Gilead Sciences: Low Expectations
Seeking Alpha - Apr 28, 2017
As Hepatitis C sales are declined, HIV and other antiviral sales have slowly been working toward parity, are now also facing competition.
Chesley Taft & Associates LLC Sells 245 Shares of Gilead Sciences, Inc. (GILD) - The Cerbat Gem
Exxonmobil Investment Management Inc. TX Sells 14693 Shares of Gilead Sciences ... - BNB Daily (blog)
Gilead Sciences Near 3-Year Low. Time To Buy?
Seeking Alpha - Apr 19, 2017
President Trump's stance on health care and tough talk on bringing down the price of drugs is continuing to weigh on pharma stocks across the board.
Here's The Real Reason Gilead Sciences Is So Incredibly Cheap - Motley Fool
Gilead Sciences: Just Like Thermopylae? - Barron's (blog)
William Blair Tweaks Estimates For Gilead Sciences, Inc. (GILD) Ahead Of Q1 Print
Smarter Analyst - Apr 24, 2017
As the earnings season kicks off for the biotechnology sector, William Blair analyst John Sonnier outlined updated earnings per share (EPS) estimates for Gilead Sciences, Inc. (NASDAQ:GILD), increasing his Q1 EPS estimate to $2.24 from $2.21. Full-year ...
Gilead Sciences: A Future Dividend Gold Mine At A Bargain Price - Seeking Alpha
Better Buy: Gilead Sciences vs. Celgene - Motley Fool
Gilead Sciences: The Company Did Exactly As Promised
Seeking Alpha - Apr 4, 2017
Gilead (NASDAQ:GILD) has been under fire from investors in recent years due to poor performance of its stock. The company invented a cure for hepatitis C, which helped millions of people around the world.
Credit Suisse On Gilead Sciences, Inc. (GILD) - Smаrt Stоck Nеws
Here's How Gilead Sciences, Inc. (NASDAQ:GILD) Will Make a Comeback
Library For Smart Investors - Apr 18, 2017
Gilead Sciences, Inc. (NASDAQ:GILD) has the biggest market share in the HIV drugs industry. The company reported a total sales of about $12.8 billion in 2016 from its 8 HIV treatments.
Why Gilead Sciences Could Be a Gold Mine for Value Investors - Motley Fool
Gilead Sciences, Inc. (GILD) Rating Increased to Hold at Zacks Investment Research - BBNS
Gilead: The ContraVir Call Option
Seeking Alpha - Apr 10, 2017
Gilead Sciences (NASDAQ:GILD) has been a beacon of hope for individuals with life threatening viruses such has Hepatitis C or AIDS.
Gilead And Intellia Therapeutics A Natural Fit
Seeking Alpha - Apr 13, 2017
There has been no shortage of analysts, investors, and arm-chair quarterbacks weighing in on what Gilead Sciences (NASDAQ:GILD) should do to spur revenue growth and strengthen their pipeline.
Throwing In The Towel On Gilead
Seeking Alpha - Apr 11, 2017
Gilead Sciences: A Future Dividend Gold Mine At A Bargain Price. PendragonY • Apr. 24, 2017 1:11 PM ET. Giovanni DiMauro.
Gilead Sciences Inc. declined in the Previous Trading Session with the Change ... - Free Observer
Drilling Down Into Gilead Sciences, Inc. (GILD) - StockNewsJournal
Why Gilead (GILD) Might Surprise This Earnings Season
Yahoo Finance - Apr 28, 2017
Investors are always looking for stocks that are poised to beat at earnings season and Gilead Sciences, Inc. GILD may be one such company.
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.

$68.55 Current Price

$158.02 Growth Price (DCF)

Undervalued by 130.52%


Growth Rate Assumed by Market: -9.79%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$45.53 Stability Price (EPV)

Overvalued by 33.58%


Discount Rate: 15.0%

$143.37 Book Price

Undervalued by 109.15%


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