GILD  Gilead Sciences Inc.

Exchange

NASDAQ

Sector

Health Care

Industry

Biotechnology: Biological Products (No Diagnostic Substances)

Market Cap.

94.17B

Vuru Grade

92.50/100

Current Price

$72.11
-0.23 (-0.32%)

Growth Price

$158.16
Undervalued by 119.34%

Stability Price

$45.57
Overvalued by 36.81%

Company Metrics

  • P/E 7.83
  • P/S 3.32
  • P/B 4.17
  • EPS 9.21
  • Cash ROIC 44.12%
  • Cash Ratio 1.29
  • Dividend 2.08 / 2.88%
  • Avg. Vol. 8.77M
  • Shares 1.31B
  • Market Cap. 94.17B

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

Gilead: Road To $100
Seeking Alpha - Aug 18, 2017
On Gilead's radar might be Vertex Pharmaceuticals (VRTX), which is the $37 billion market cap biotech company. But the bigger thing for Gilead is that it needs to find a player in the oncology field. That means Incyte (INCY) could work well - a $25 ...
Gilead Sciences, Inc. Boosts Its Full-Year Outlook Thanks to Stronger-Than ...
Motley Fool - Jul 26, 2017
When Gilead Sciences, Inc. (NASDAQ:GILD) reported its first-quarter results earlier this year, everyone expected sales for the biotech's hepatitis C franchise to be way down.
Gilead Sciences shares rise after quarterly results top Street view - MarketWatch
Gilead Sciences, Inc. (GILD) Stock Has Tremendous Potential Even Post-Rally - Investorplace.com
The case for Gilead Sciences
Motley Fool - Jul 22, 2017
The company initiated its dividend program in 2015 and has increased the payment 10% each year since. Gilead uses only 20% of earnings to fund the dividend program, so further hikes should be in store.
What Do Analysts Suggest For Gilead Sciences Inc. (GILD) - News Oracle
Gilead Sciences, Inc. (NASDAQ:GILD) Closed Well Above Its 50 Day Moving Average - First News 24
Gilead Sciences: Sell This 'Rally'
Seeking Alpha - Aug 9, 2017
To say that the financial markets have a love/hate relationship with Gilead Sciences, Inc. (GILD) would be a pretty clear understatement.
Gilead Sciences: Easier Said Than Done - Barron's
Gilead Sciences, Inc. (GILD) Receives Consensus Recommendation of "Buy" from ... - AppsforPCdaily
Gilead Sciences to unveil 23-acre campus in La Verne this week
Inland Valley Daily Bulletin - Aug 15, 2017
Gilead Sciences, a biopharmaceutical company that employs 9,000 people worldwide, will unveil this new 23-acre campus in La Verne on Wednesday.
Mavyret Could Amplify Gilead's HCV Pain
Seeking Alpha - Aug 14, 2017
AbbVie Inc. last week threw another big curve at this market by pricing its newly FDA-approved drug Mavyret -- which might be the most effective HCV medicine approved yet -- at a massive discount ... AbbVie's $13,200 monthly price for Mavyret looks ...
Good News For Gilead's Bictegravir Regimen
Seeking Alpha - Aug 15, 2017
Gilead is seeing continuous growth in HIV and other areas. Its Bic regimen for HIV could come to the market in Q1 2018. The company has many ways to grow its revenues and earnings again, and thus looks inexpensive at the current valuation. Gilead's ...
Gilead Stock In Revival Mode With Promising HIV Market And Stabilizing HCV Numbers
Seeking Alpha - Aug 16, 2017
Gilead Sciences expects the FDA decision for bictegravir early next year, boosting its position in HIV market. The decline in its HCV segment may have bottommed out despite the Mavyret threat.
Gilead (GILD) HCV Drug Vosevi Receives Approval in Canada
Yahoo Finance - Aug 18, 2017
Gilead Sciences, Inc. GILD announced that Health Canada has granted a Notice of Compliance for its single-tablet regimen, Vosevi (sofosbuvir 400 mg/velpatasvir 100 mg/voxilaprevir 100 mg), for the treatment of chronic hepatitis C virus (HCV) infection.
Orbimed Advisors Llc Buys Cigna Corp, Clovis Oncology Inc, Gilead Sciences Inc ...
Nasdaq - Aug 18, 2017
Orbimed Advisors Llc added to the holdings in Gilead Sciences Inc by 158.88%. The purchase prices were between $64.12 and $71.92, with an estimated average price of $66.5.
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.

$72.11 Current Price

$158.16 Growth Price (DCF)

Undervalued by 119.34%


Growth Rate Assumed by Market: -8.09%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$45.57 Stability Price (EPV)

Overvalued by 36.81%


Discount Rate: 15.0%

$143.08 Book Price

Undervalued by 98.41%


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