Is Gilead Sciences Still a Buy Post COVID-19?

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

GILD – Gilead Sciences’ (GILD) popular covid product Veklury (Remdisivir) witnessed declining sales in the post-pandemic era. However, the company’s top line, excluding Veklury, has seen steady growth. Moreover, despite ongoing market volatility, the stock has registered stable gains. So, let’s find out if GILD is still a buy in the post-covid era….

Healthcare company Gilead Sciences, Inc. (GILD) benefited significantly during the pandemic as it developed the first antiviral drug approved to treat COVID-19. However, with declining covid cases, GILD’s popular covid product Veklury’s (Remdisivir) sales decreased 51.9% year-over-year to $925 million for the third quarter ended September 2022.

However, GILD beat consensus revenue and EPS estimates for the quarter. Analysts expected GILD’s revenue and EPS to come in at $6.13 billion and $1.43. GILD surpassed forecasts by 14.8% and 32.9%, respectively.

Additionally, according to GILD’s Chairman and CEO, Daniel O’Day, “In oncology, there is increasing demand for cell therapies and Trodelvy. Yescarta and Tecartus received two approvals in Europe and Trodelvy was granted FDA Priority Review for HR+/HER2- metastatic breast cancer.”

Trodelvy’s sales increased 78.2% year-over-year to $180 million for the 2022 third quarter. Moreover, the company’s Vemlidy® (tenofovir alafenamide) 25 mg tablets got approved by the U.S. Food and Drug Administration as a once-daily treatment for chronic hepatitis B virus infection, which is yet another milestone achievement for GILD.

The company is continuously investing in medicine and research, which is expected to boost its position in the industry.

GILD has gained 24.6% over the past month to close the last trading session at $81.82. It has gained 12.7% year-to-date and 21.3% over the past year. Moreover, the stock is trading above its 50-day and 200-day moving averages of $68.68 and $63.59, respectively.

Here is what could shape GILD’s performance in the near term:

Top-line Growth, Excluding Veklury (Remdisivir)

GILD’s HIV-segment sales came in at $4.49 billion for the third quarter that ended September 30, 2022, up 7.1% year-over-year. Its HCV-segment sales came in at $524 million, up 22.1% year-over-year.

Moreover, its Cell Therapy segment sales came in at $398 million, up 79.3% year-over-year. Its total sales, excluding Veklury, increased 11.4% year-over-year to $6.05 billion. In addition, its cash and cash equivalents came in at $4.70 billion, up 7.7% year-over-year.

Attractive Valuation

GILD’s forward EV/EBITDA of 8.58x is 35.9% lower than the industry average of 13.39x. Its forward Price/Sales of 3.87x is 10% lower than the industry average of 4.30x. Also, its forward Price/Cash Flow of 10.50x is 40.7% lower than the industry average of 17.71x.

Robust Profitability

GILD’s trailing-12-month gross profit margin of 79.22% is 45.9% higher than the industry average of 54.31%. Its trailing-12-month EBITDA margin of 47.08% is substantially higher than the industry average of 3.04%, while its trailing-12-month net income margin of 12.29% is higher than the negative industry average of 5.84%.

Furthermore, its trailing-12-month ROCE, ROTC, and ROTA of 15.67%, 13.97%, and 5.33% compared with the industry averages of negative 38.67%, 21.39%, and 30.70%, respectively.

POWR Ratings Reflect Promising Outlook

GILD has an overall rating of A, which equates to a Strong Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

GILD has an A grade for Value, consistent with its lower-than-the-industry valuation multiples. It has a B grade for Quality, in sync with its higher-than-industry profitability margins.

In the 380-stock Biotech industry, GILD is ranked #3.

Click here for the additional POWR Ratings for GILD (Growth, Momentum, Stability, Sentiment).

View all the top stocks in the Biotech industry here.

Bottom Line

GILD has been a major beneficiary of Covid-19. Although its pandemic-led sales are slowing, the company’s lucrative investments in developing treatments for various ailments should help it grow.

Moreover, GILD’s dividend payouts have increased at a 7.4% CAGR over the past five years and a 5.6% CAGR over the past three years. Its current dividend yield is 3.57%, while its four-year average yield is 4.00%. Thus, I think GILD might be worth adding to your portfolio.

How Does Gilead Sciences, Inc. (GILD) Stack up Against Its Peers?

While GILD has an overall POWR Rating of A, one might consider looking at its industry peers, Vertex Pharmaceuticals Incorporated (VRTX), United Therapeutics Corporation (UTHR), and Biogen Inc. (BIIB), which also have an overall A (Strong Buy) rating.

GILD shares were trading at $83.48 per share on Monday morning, up $1.66 (+2.03%). Year-to-date, GILD has gained 19.23%, versus a -15.15% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
GILDGet RatingGet RatingGet Rating
VRTXGet RatingGet RatingGet Rating
UTHRGet RatingGet RatingGet Rating
BIIBGet RatingGet RatingGet Rating

Most Popular Stories on

:  |  News, Ratings, and Charts

What is “Active Investing”?

Long term investing is not an easy path to top the stock market (SPY). On the other hand most active trading approaches miss some key elements that lead to outperformance. So let’s talk about a best of both worlds approach called “Active Investing”. Read on below for more...

:  |  News, Ratings, and Charts

The 5 Best Stocks to Invest in for the Long Term

Despite current market uncertainties, the U.S. economy's long-term growth prospects are pretty viable. Experts believe inflation will fall dramatically in the coming year, and robust growth will follow. Therefore, investors could buy quality stocks Microsoft (MSFT), Vertex Pharmaceuticals (VRTX), Centene (CNC), Agilent Technologies (A), and Myers Industries (MYE), which seem poised for steady long-term growth. Keep reading…

:  |  News, Ratings, and Charts

1 Chip Stock Warren Buffett Just Bought

Warren Buffet recently purchased shares of chip giant Taiwan Semiconductor (TSM) worth more than $4 billion. The company enjoys a leadership position in the field of advanced semiconductors. However, is it well-positioned to survive the economic and industry-specific challenges now? Read on to find out…

:  |  News, Ratings, and Charts

The 3 Most Stable Stocks to Buy in This Crazy Market

Even though the most recent inflation data shows signs of cooling down, the Fed will likely continue raising rates to meet its target. Moreover, the weakening profit outlook for the fourth quarter only adds to the recession worries. Hence, fundamentally strong and stable stocks PepsiCo (PEP), Cisco Systems (CSCO), and Sprouts Farmers Market (SFM) might be solid buys in this crazy scenario. Continue reading...

:  |  News, Ratings, and Charts

1 Chip Stock Warren Buffett Just Bought

Warren Buffet recently purchased shares of chip giant Taiwan Semiconductor (TSM) worth more than $4 billion. The company enjoys a leadership position in the field of advanced semiconductors. However, is it well-positioned to survive the economic and industry-specific challenges now? Read on to find out…

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