2 Biotech Stocks That are Dirt Cheap Right Now

NASDAQ: GILD | Gilead Sciences Inc. News, Ratings, and Charts

GILD – The biotech industry has received much attention lately for its contribution to the world’s fight against COVID-19. Furthermore, with the help of new technology, the industry has been making tremendous progress in developing treatments for many previously incurable ailments. Against this backdrop, we believe two significantly undervalued biotech stocks—Gilead Sciences (GILD) and Regeneron Pharmaceuticals (REGN)—are positioned nicely to deliver solid returns owing to the companies’ continued innovation and strong financials. Read on.

Biotech companies responded to the COVID-19 pandemic in a remarkable way, with vaccinations, treatments, diagnostics, and variant monitoring. The sector is reaping big  benefits as a result of these initiatives, including improved investor interest, government backing, and a burnished public image. Investor optimism surrounding the sector is evident in iShares Biotechnology ETF’s (IBB) 16.2% returns over the past year.

Furthermore, the increasing prevalence of chronic diseases throughout the world has raised the demand for medication. The global biotechnology market is expected to reach $2.44 trillion in 2028, growing at a 15.8% CAGR.

Considering the industry’s solid growth prospects, we believe shares of biotechnology companies Gilead Sciences, Inc. (GILD) and Regeneron Pharmaceuticals, Inc. (REGN) are attractively cheap at their current price levels. Therefore, investing in these stocks could be rewarding.

Click here to checkout our Healthcare Sector Report for 2021

Gilead Sciences, Inc. (GILD)

Known for its blockbuster COVID-19 drug Remdesivir, Foster City, Calif.-based GILD is a leading biotech company that focuses on discovering, developing, and commercializing medications for chronic illnesses. The company offers treatments for various illnesses, including  Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS), liver diseases, cancer, respiratory diseases and cardiovascular conditions.

Last month, GILD submitted a new drug application to the U.S. Food and Drug Administration (FDA) for approval of lenacapavir, an investigational, long-acting HIV-1 capsid inhibitor for the treatment of HIV-1 infection in heavily treatment-experienced (HTE) people with MDR HIV-1 infection. If GILD is granted  an  approval, it would open up new revenue generating streams for the company and have a positive impact on its future performance.

GILD’s total revenue increased 15.8% year-over-year to $6.42 billion in the first quarter, ended March 31, 2021. Its non-GAAP operating income surged 26.1% year-over-year to $3.49 billion. The company’s non-GAAP net income increased 22.9% from its  year-ago value to $2.63 billion over this period. GILD’s non-GAAP EPS increased 23.8% year-over-year to $2.08.

The company’s EPS is expected to be  $7.07 in the current year. GILD’s stock has gained 17.1% year-to-date and 6.9% over the past nine months.

In terms of forward Price/Sales, GILD is currently trading at 3.47x, which is 57.1% lower than the 8.09x industry average. The stock’s 9.65x forward P/E  is 60.3% lower than the 24.3x industry average.

It is no surprise that GILD has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting. GILD is also rated an A grade for Value, and a B for Growth and Quality. Within the Biotech industry, it is ranked #9 of 497 stocks.

In addition to the POWR Ratings grades we have just highlighted, one can see the GILD rating for Stability, Sentiment, and Momentum here.

Regeneron Pharmaceuticals, Inc. (REGN)

REGN in Tarrytown, N.Y., is a biopharmaceutical company that develops, produces, and sells medications for the treatment of severe diseases. The company has an agreement with the U.S. Department of Health and Human Services and license agreements with companies that include  Sanofi, Bayer, Teva Pharmaceutical Industries Ltd., Mitsubishi Tanabe Pharma Corporation, and others.

This month, researchers at REGN’s  Regeneron Genetics Center (RGC)  found uncommon genetic variants in the GPR75 gene that are linked to obesity protection. Regeneron is working on potential treatments that replicate these genetic superpowers, using its VelocImmune technologies as well as innovative technologies from collaborators, such as Alnylam Pharmaceuticals, Inc.

Last month, the U.S. Food and Drug Administration (FDA) revised its Emergency Use Authorization (EUA) for REGEN-COVTM, decreasing the dose to 1,200 mg (600 mg casirivimab and 600 mg imdevimab), which is half the quantity initially approved. REGEN-COV is approved under an EUA for the treatment of mild-to-moderate COVID-19 in adults and children who have tested positive for SARS-CoV-2 virus and are at high risk of developing severe COVID-19.

During the first quarter, ended March 31, 2021, REGN’s revenue increased 38.3% year-over-year to $2.53 billion. Its operating income rose 58.9% from its  year-ago value to $1.11 billion. The company’s non-GAAP net income increased 43.9% year-over-year to $1.11 billion, while its non-GAAP EPS came in at $9.89 for this quarter.

REGN is expected to generate 42.4%  revenue growth in the current year. Its EPS is estimated to increase 49.4% from its year-ago value to $47.01 in the current year. REGN’s stock has gained 20.1% year-to-date and 22.1% over the past three months.

In terms of forward Price/Sales, REGN is currently trading at 4.96x, which is 38.7% lower than the 8.09x industry average. Also, the stock’s 12.21x forward P/E  is also 49.7% lower than the 24.28x industry average.

REGN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. REGN has an A grade for Growth and Value, and a B for Quality. Among the 497 stocks, it is ranked #4 in the Biotech  industry. Click here to see more of REGN’s component grades (Momentum, Sentiment, and Stability).

Click here to checkout our Healthcare Sector Report for 2021


GILD shares were trading at $68.71 per share on Monday morning, up $0.49 (+0.72%). Year-to-date, GILD has gained 20.52%, versus a 17.43% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
GILDGet RatingGet RatingGet Rating
REGNGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Bears Back in Charge...What Happens Next?

A month ago the bulls were claiming victory as they created a charge back over 4,000 for the S&P 500 (SPY). Since then that false narrative has been peeled away and investors are more honestly looking at the bleak outlook formed by high inflation and a hawkish Fed. That explains why we are back retesting the June lows. Now we have to ponder what comes next and how to trade our way to profits. Read on below for the full story...

:  |  News, Ratings, and Charts

2 Warren Buffett Stocks to Buy and Never Sell

Warren Buffett’s long-term value investing strategy serves as a guide for investors to ensure high returns. With the market volatility becoming more severe after the Fed’s recent interest rate hike, Buffett’s top holdings could be ideal investments for long-term investors. To that end, buying and holding Johnson & Johnson (JNJ) and United Parcel Service (UPS) could be wise. Continue reading…

:  |  News, Ratings, and Charts

3 Stocks That’ll Help You Score Big No Matter What Happens Next

The Fed launched another 75-basis-point rate hike this week and signaled it would keep increasing rates until inflation is under control. The consecutive rate hikes are raising recession concerns. We think fundamentally solid stocks Bristol-Myers (BMY), AT&T (T), and Gilead Sciences (GILD), which have the potential to deliver steady returns despite market uncertainties, could be ideal buys now. Keep reading…

:  |  News, Ratings, and Charts

The Most Sought-After Tech Stock to Buy Right Now

Shares of Microsoft (MSFT) have shed more than 25% year-to-date, with the rising interest rates causing a massive tech sell-off. However, the current low price level allows long-term investors to take a position in the stock to benefit from its solid growth prospects. The company has guided double-digit growth for fiscal 2023. Moreover, MSFT has been increasingly paying dividends, which should help generate a steady income stream. Read more…

:  |  News, Ratings, and Charts

3 Stocks That’ll Help You Score Big No Matter What Happens Next

The Fed launched another 75-basis-point rate hike this week and signaled it would keep increasing rates until inflation is under control. The consecutive rate hikes are raising recession concerns. We think fundamentally solid stocks Bristol-Myers (BMY), AT&T (T), and Gilead Sciences (GILD), which have the potential to deliver steady returns despite market uncertainties, could be ideal buys now. Keep reading…

Read More Stories

More Gilead Sciences Inc. (GILD) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All GILD News