Gilead Sciences, Inc.

GILD

Biological Products, (No Diagnostic Substances)

Mkt Cap

$79.83B

PE

174.30

Debt

$28.86B

Cash

$4.718B

EV

$104B

FCF

$7.9B

Market Cap

$79.83B

P/E Ratio

174.30

Debt

$28.86B

Cash

$4.718B

EV

$104B

FCF

$7.9B

Charts data: {"Earnings":[{"time":"2014-12-30","value":12059000000},{"time":"2015-12-30","value":18106000000},{"time":"2016-12-30","value":13488000000},{"time":"2017-12-30","value":4628000000},{"time":"2018-12-30","value":5455000000},{"time":"2019-12-30","value":5364000000},{"time":"2020-12-30","value":89000000},{"time":"2021-12-30","value":6201000000},{"time":"2022-12-30","value":4566000000},{"time":"2023-12-30","value":5613000000}],"Sales":[{"time":"2014-12-30","value":24890000000},{"time":"2015-12-30","value":32639000000},{"time":"2016-12-30","value":30390000000},{"time":"2017-12-30","value":26107000000},{"time":"2018-12-30","value":22127000000},{"time":"2019-12-30","value":22449000000},{"time":"2020-12-30","value":24689000000},{"time":"2021-12-30","value":27305000000},{"time":"2022-12-30","value":27281000000},{"time":"2023-12-30","value":27116000000}],"Net Margins":[{"time":"2014-12-30","value":0.4844917637605464},{"time":"2015-12-30","value":0.5547351328165692},{"time":"2016-12-30","value":0.44383020730503453},{"time":"2017-12-30","value":0.17727046386026737},{"time":"2018-12-30","value":0.24653138699326616},{"time":"2019-12-30","value":0.23894160096218095},{"time":"2020-12-30","value":0.003604844262627081},{"time":"2021-12-30","value":0.2271012635048526},{"time":"2022-12-30","value":0.16736923133316228},{"time":"2023-12-30","value":0.20699955745685206}],"Assets":[{"time":"2014-12-30","value":34664000000},{"time":"2015-12-30","value":51839000000},{"time":"2016-12-30","value":56977000000},{"time":"2017-12-30","value":70283000000},{"time":"2018-12-30","value":63675000000},{"time":"2019-12-30","value":61627000000},{"time":"2020-12-30","value":68407000000},{"time":"2021-12-30","value":67952000000},{"time":"2022-12-30","value":63171000000},{"time":"2023-12-30","value":62125000000}],"Stockholders Equity":[{"time":"2014-12-30","value":15819000000},{"time":"2015-12-30","value":19113000000},{"time":"2016-12-30","value":19363000000},{"time":"2017-12-30","value":20501000000},{"time":"2018-12-30","value":21534000000},{"time":"2019-12-30","value":22650000000},{"time":"2020-12-30","value":18221000000},{"time":"2021-12-30","value":21069000000},{"time":"2022-12-30","value":21240000000},{"time":"2023-12-30","value":22833000000}],"ROE":[{"time":"2014-12-30","value":0.7623111448258424},{"time":"2015-12-30","value":0.9473133469366399},{"time":"2016-12-30","value":0.6965862727883076},{"time":"2017-12-30","value":0.2257450856055802},{"time":"2018-12-30","value":0.25332033063991827},{"time":"2019-12-30","value":0.23682119205298013},{"time":"2020-12-30","value":0.004884473958619176},{"time":"2021-12-30","value":0.29431866723622385},{"time":"2022-12-30","value":0.21497175141242938},{"time":"2023-12-30","value":0.2458284062541059}],"ROA":[{"time":"2014-12-30","value":0.440456958227556},{"time":"2015-12-30","value":0.4310847045660603},{"time":"2016-12-30","value":0.3169875563823999},{"time":"2017-12-30","value":0.20840032440277165},{"time":"2018-12-30","value":0.1393953670985473},{"time":"2019-12-30","value":0.09987505476495692},{"time":"2020-12-30","value":0.05951145350622012},{"time":"2021-12-30","value":0.14595596891923712},{"time":"2022-12-30","value":0.11603425622516661},{"time":"2023-12-30","value":0.12241448692152918}]}

Gilead Sciences, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally. The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/ Eviplera, Stribild, and Atripla products for the treatment of HIV/AIDS; Veklury, an injection for intravenous use, for the treatment of coronavirus disease 2019; and Epclusa, Harvoni, Vosevi, Vemlidy, and Viread for the treatment of viral hepatitis. It also offers Yescarta, Tecartus, Trodelvy, and Zydelig products for the treatment of oncology; Letairis, an oral formulation for the treatment of pulmonary arterial hypertension; and AmBisome, a liposomal formulation for the treatment of serious invasive fungal infections. Gilead Sciences, Inc. has collaboration agreements with Arcus Biosciences, Inc.; Merck & Co, Inc.; Pionyr Immunotherapeutics Inc.; Tizona Therapeutics, Inc.; Tango Therapeutics, Inc.; Jounce Therapeutics, Inc.; Galapagos NV; Janssen Sciences Ireland Unlimited Company; Japan Tobacco, Inc.; Dragonfly Therapeutics, Inc.; and Merck & Co, Inc. The company was incorporated in 1987 and is headquartered in Foster City, California.

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3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Gilead Sciences, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$7.9B	$7.213B	$6.586B	$6.013B	$5.49B	$5.012B	$4.576B	$4.178B	$3.815B	$3.483B	$3.18B	$31.8B
DCF		$6.272B	$4.98B	$3.953B	$3.139B	$2.492B	$1.978B	$1.571B	$1.247B	$990.1M	$786.1M	$7.861B
Value	$35.27B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -19%

Earnings Stability 24%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	55%	44%	18%	25%	24%	0.36%	23%	17%	21%	1.7%
ROA	43%	32%	21%	14%	10%	6%	15%	12%	12%	2.8%
ROE	95%	70%	23%	25%	24%	0.49%	29%	21%	25%	2.6%

What is the average Net Margin?

The average Net Margin over the past 5 years is +18.18%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.54%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +11.39%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.14%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +20.84%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +0.53%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	1.18	1.65	3.21	4.02	3.26	4.54	2.61	3.30	3.61	3.65
Debt Equity	1.21	1.36	1.77	1.40	1.20	1.87	1.34	1.29	1.17	1.65
MIN
Graham Stability	-	-	32%	45%	68%	1.7%	100%	100%	100%	1.7%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 3.65.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.11.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.02.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	-1.6%	4.2%	3.2%	-0.6%	-0.53%
Net Income	-12%	0.57%	300%	23%	230%
Stockholders Equity	2.4%	1.2%	7.8%	7.5%	-1%
FCF	-10%	-0.15%	-0.43%	-11%	-2.1%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +4.15%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -0.53%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +0.57%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +227.31%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +1.18%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -1%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -0.15%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -2.09%.