GILD  Gilead Sciences Inc.

Exchange

NASDAQ

Sector

Health Care

Industry

Biotechnology: Biological Products (No Diagnostic Substances)

Market Cap.

91503.49B

Vuru Grade

92.50/100

Current Price

$69.85
-0.46 (-0.65%)

Growth Price

$163.94
Undervalued by 134.70%

Stability Price

$51.35
Overvalued by 26.49%

Company Metrics

  • P/E 7.03
  • P/S 3030.8
  • P/B 4.76
  • EPS 9.94
  • Cash ROIC 49.59%
  • Cash Ratio 1.48
  • Dividend 2.08 / 2.96%
  • Avg. Vol. 10.66M
  • Shares 1.52B
  • Market Cap. 91503.49B

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

Why Gilead Sciences Is a Buy
Motley Fool - 7 hours ago
Michael Douglass: Gilead Sciences is a stock that is primarily in two businesses today: treating HIV and curing hepatitis C. It is the market share leader in both.
Better Buy: Gilead Sciences, Inc. vs. Pfizer Inc. - Madison.com
Why Gilead Sciences Inc (NASDAQ:GILD) Stock Owners Shouldn't Expect Acquisitions - BNL Finance (press release) (registration) (blog)
Why I Just Bought More Shares of Gilead Sciences, Inc.
Motley Fool - Feb 14, 2017
So you might be wondering why I was so quick to scoop up more shares of Gilead Sciences (NASDAQ:GILD) stock after its latest earnings report.
Gilead: An Inflection Point? - Seeking Alpha
Gilead Sciences (GILD) Shares Cross 3% Yield Mark - Nasdaq
Why President Trump Should Buy Gilead Sciences
Motley Fool - Feb 17, 2017
Problem is, right now, not a lot of folks on Wall Street do think Gilead Sciences is a great deal. Thanks to the company's rapidly evaporating HCV franchise, analysts currently predict at least five straight years of precisely 0% profits growth at ...
Gilead Sciences Inc. Reports Q4 Earnings Decline and Worsening Outlook for 2017
Motley Fool - Feb 7, 2017
Anyone who follows Gilead Sciences was probably most interested in the company's hepatitis C virus (HCV) franchise performance in the fourth quarter.
Gilead Sciences: Down It Goes - Seeking Alpha
Relative Strength Alert For Gilead Sciences - Forbes
Gilead's HCV Guidance Wasn't Sandbagged
Seeking Alpha - Feb 17, 2017
HCV revenue has seen sharp declines in the last year, and guidance suggests it won't be better for FY'17. Investors struggle to value effectively lumpy cash flow businesses due to the desire for steady cash flow generation and revenue growth ...
3 Reasons Gilead Sciences Inc. Stock Could Rise
Motley Fool - Jan 26, 2017
After rising to greatness following the launch of multiple hepatitis C drugs, sales have slipped, and Gilead Sciences (NASDAQ:GILD) shares have been knocked down to levels not seen since 2014.
Better Buy: Biogen Inc. vs. Gilead Sciences Inc. - Fox Business
Don't Trust Gilead's P/E Ratio - Seeking Alpha
Will Gilead Buy Bristol-Myers Squibb?
Seeking Alpha - Feb 15, 2017
Gilead (NASDAQ:GILD) has hit new multi year lows after the company reported its fourth quarter results and provided guidance for the current year that sees revenues and earnings coming in well below what analysts have been estimating for 2017.
Deutsche Bank Casts Doubt On Pfizer's Rumored Takeover Approach To Bristol-Myers - Benzinga
Gilead Sciences, Inc. (GILD): Bictegravir HIV Data Looks Good
Smarter Analyst - Feb 14, 2017
Gilead Sciences, Inc. (NASDAQ:GILD) announced yesterday positive phase 2 results for bictegravir vs. GSK/ViiV's dolutegravir (Tivicay) in combination with F/TAF in treatment naive HIV patients.
Gilead Presents New Phase 2 Data on Bictegravir, an Investigational Integrase ... - Business Wire (press release)
Gilead Sciences: Not Out of the Woods Yet? - Barron's (blog)
Gilead Could Go Lower
Seeking Alpha - Feb 10, 2017
Since the 3rd of November last, Gilead's returns have been dismal compared to the Biotechnology Index ETF (NASDAQ:IBB) and also Pfizer Inc.(NYSE:PFE), which is a bellwether stock in this sector. Again, it wasn't necessarily the company's fourth-quarter ...
Is Gilead Sciences Getting Ready for a Massive Acquisition?
Motley Fool - Feb 12, 2017
When asked if Gilead Sciences can grow without an acquisition, Milligan didn't directly address the question. He noted the company's headwinds in the hepatitis C virus (HCV) market and the loss of patent protection for a few drugs over the next few years.
Gilead Sciences Will More Than Survive 2017 - Seeking Alpha
Gilead Sciences, Fossil Reach 3-Year Low Prices - Nasdaq
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.

$69.85 Current Price

$163.94 Growth Price (DCF)

Undervalued by 134.70%


Growth Rate Assumed by Market: -9.56%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$51.35 Stability Price (EPV)

Overvalued by 26.49%


Discount Rate: 15.0%

$138.35 Book Price

Undervalued by 98.07%


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 $49.59 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 3.51B 2.80B 2.91B 12.26B 19.58B
divided by
Invested Capital 4.89B 15.11B 14.04B 18.78B 27.34B
Cash ROIC 71.75% 18.52% 20.76% 65.30% 71.62%

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 $54.40 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 2.80B 2.57B 3.06B 12.06B 18.11B
divided by
Stockholders' Equity 6.74B 9.31B 11.37B 15.43B 18.53B
Return on Equity 41.60% 27.64% 26.89% 78.17% 97.69%

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
2006200720082009201020112012201320142015
Free Cash Flow 1.11B 1.69B 2.09B 2.85B 2.77B 3.51B 2.80B 2.91B 12.26B 19.58B

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
2006200720082009201020112012201320142015
Cash 936.85M 1.17B 1.79B 1.66B 2.10B 9.90B 1.86B 2.13B 10.13B 14.61B
Current Assets 2.43B 3.03B 4.30B 4.81B 5.71B 13.92B 6.16B 7.27B 17.71B 24.76B
Total Assets 4.09B 5.83B 7.02B 9.70B 11.59B 17.30B 21.24B 22.50B 34.66B 51.84B
Current Liabilities 764.28M 736.28M 1.22B 1.87B 2.46B 2.51B 4.27B 6.33B 5.76B 9.89B
Total Liabilities 2.27B 2.37B 2.87B 3.33B 5.73B 10.56B 11.93B 11.13B 19.24B 33.31B
Stockholder' Equity 1.82B 3.46B 4.15B 6.37B 5.86B 6.74B 9.31B 11.37B 15.43B 18.53B
Current Ratio 3.18 4.11 3.52 2.57 2.32 5.53 1.44 1.15 3.07 2.50
TL-to-TA 0.56 0.41 0.41 0.34 0.49 0.61 0.56 0.49 0.55 0.64

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
2006200720082009201020112012201320142015
Retained Earnings -891.36M 249.08M 382.87M 2.00B 1.18B 1.78B 3.70B 6.11B 12.73B 18.00B
Retained Earnings Growth - 127.94% 53.72% 421.13% -40.67% 50.10% 108.51% 64.80% 108.54% 41.38%

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.

$30.18 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income -1.19B 1.62B 2.01B 2.64B 2.90B 2.80B 2.57B 3.06B 12.06B 18.11B
divided by
Revenue 3.03B 4.23B 5.34B 7.01B 7.95B 8.39B 9.70B 11.20B 24.89B 32.64B
Net Profit Margin -39.32% 38.19% 37.69% 37.59% 36.50% 33.43% 26.53% 27.29% 48.45% 55.47%

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.

$80.70 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
2006200720082009201020112012201320142015
Gross Profit 2.59B 3.46B 4.21B 5.42B 6.08B 7.16B 7.23B 8.34B 21.10B 28.63B
divided by
Revenue 3.03B 4.23B 5.34B 7.01B 7.95B 8.39B 9.70B 11.20B 24.89B 32.64B
Gross Margin 85.68% 81.83% 78.87% 77.24% 76.48% 85.34% 74.53% 74.48% 84.78% 87.73%

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.

6.29% 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
2006200720082009201020112012201320142015
Capital Expenditure 105.21M 78.65M 115.01M 230.06M 61.88M 131.90M 397.05M 190.78M 557.00M 747.00M
divided by
Net Income -1.19B 1.62B 2.01B 2.64B 2.90B 2.80B 2.57B 3.06B 12.06B 18.11B
Capital Expenditure Ratio -8.84% 4.87% 5.72% 8.73% 2.13% 4.70% 15.43% 6.24% 4.62% 4.13%

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
2006200720082009201020112012201320142015
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 918.21M 964.36M 958.83M 934.11M 873.40M 790.12M 3.17B 1.69B 1.65B 1.52B
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 32.47 46.33 51.33 43.80 36.26 40.93 72.38 75.08 95.30 102.16
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
2006200720082009201020112012201320142015
Shares Outstanding 918.21M 964.36M 958.83M 934.11M 873.40M 790.12M 3.17B 1.69B 1.65B 1.52B
Stock Bought Back - -4.78% 0.58% 2.65% 6.95% 10.54% -75.04% 86.76% 2.90% 8.28%
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Discussion
Sort By:
1
Posted by pbanik  (3 weeks ago)
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