Decent Value Stocks. Analyze the stocks with a good fundamental valuation, while still showing decent profitability, health and growth.


GILEAD SCIENCES INC

Nasdaq / Health Care / Biotechnology

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to GILD. GILD was compared to 567 industry peers in the Biotechnology industry. GILD scores excellent on profitability, but there are some minor concerns on its financial health. GILD may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make GILD suitable for value investing!


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

GILD had positive earnings in the past year.
In the past year GILD had a positive cash flow from operations.
In the past 5 years GILD has always been profitable.
GILD had a positive operating cash flow in each of the past 5 years.
GILD Yearly Net Income VS EBIT VS OCF VS FCFGILD Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

1.2 Ratios

With an excellent Return On Assets value of 0.81%, GILD belongs to the best of the industry, outperforming 91.34% of the companies in the same industry.
GILD's Return On Equity of 2.48% is amongst the best of the industry. GILD outperforms 92.40% of its industry peers.
The Return On Invested Capital of GILD (17.45%) is better than 97.53% of its industry peers.
GILD had an Average Return On Invested Capital over the past 3 years of 15.57%. This is in line with the industry average of 14.24%.
The last Return On Invested Capital (17.45%) for GILD is above the 3 year average (15.57%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 0.81%
ROE 2.48%
ROIC 17.45%
ROA(3y)5.73%
ROA(5y)5.31%
ROE(3y)16.3%
ROE(5y)15.83%
ROIC(3y)15.57%
ROIC(5y)13.08%
GILD Yearly ROA, ROE, ROICGILD Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

1.3 Margins

The Profit Margin of GILD (1.67%) is better than 91.87% of its industry peers.
GILD's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 37.70%, GILD belongs to the top of the industry, outperforming 99.12% of the companies in the same industry.
In the last couple of years the Operating Margin of GILD has grown nicely.
With an excellent Gross Margin value of 78.26%, GILD belongs to the best of the industry, outperforming 83.92% of the companies in the same industry.
In the last couple of years the Gross Margin of GILD has remained more or less at the same level.
Industry RankSector Rank
OM 37.7%
PM (TTM) 1.67%
GM 78.26%
OM growth 3Y1.21%
OM growth 5Y13.65%
PM growth 3Y-58.16%
PM growth 5Y-41.32%
GM growth 3Y1.06%
GM growth 5Y-0.23%
GILD Yearly Profit, Operating, Gross MarginsGILD Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

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5

2. Health

2.1 Basic Checks

GILD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, GILD has about the same amount of shares outstanding.
GILD has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, GILD has a worse debt to assets ratio.
GILD Yearly Shares OutstandingGILD Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B
GILD Yearly Total Debt VS Total AssetsGILD Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B

2.2 Solvency

An Altman-Z score of 3.46 indicates that GILD is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.46, GILD is in the better half of the industry, outperforming 77.03% of the companies in the same industry.
The Debt to FCF ratio of GILD is 2.59, which is a good value as it means it would take GILD, 2.59 years of fcf income to pay off all of its debts.
GILD's Debt to FCF ratio of 2.59 is amongst the best of the industry. GILD outperforms 94.17% of its industry peers.
GILD has a Debt/Equity ratio of 1.29. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of GILD (1.29) is worse than 79.33% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.29
Debt/FCF 2.59
Altman-Z 3.46
ROIC/WACC1.83
WACC9.55%
GILD Yearly LT Debt VS Equity VS FCFGILD Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B

2.3 Liquidity

GILD has a Current Ratio of 1.60. This is a normal value and indicates that GILD is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of GILD (1.60) is worse than 80.92% of its industry peers.
GILD has a Quick Ratio of 1.45. This is a normal value and indicates that GILD is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of GILD (1.45) is worse than 82.16% of its industry peers.
Industry RankSector Rank
Current Ratio 1.6
Quick Ratio 1.45
GILD Yearly Current Assets VS Current LiabilitesGILD Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B

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4

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 77.93% over the past year.
GILD shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.01% yearly.
The Revenue has been growing slightly by 6.04% in the past year.
Measured over the past years, GILD shows a small growth in Revenue. The Revenue has been growing by 5.08% on average per year.
EPS 1Y (TTM)77.93%
EPS 3Y-14.17%
EPS 5Y-7.01%
EPS Q2Q%237.12%
Revenue 1Y (TTM)6.04%
Revenue growth 3Y1.74%
Revenue growth 5Y5.08%
Sales Q2Q%-0.28%

3.2 Future

Based on estimates for the next years, GILD will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.07% on average per year.
Based on estimates for the next years, GILD will show a small growth in Revenue. The Revenue will grow by 3.46% on average per year.
EPS Next Y75.86%
EPS Next 2Y36.32%
EPS Next 3Y25.4%
EPS Next 5Y17.07%
Revenue Next Year1.43%
Revenue Next 2Y2.68%
Revenue Next 3Y3.32%
Revenue Next 5Y3.46%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
GILD Yearly Revenue VS EstimatesGILD Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 10B 20B 30B
GILD Yearly EPS VS EstimatesGILD Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6 8 10

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8

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 13.40, GILD is valued correctly.
Based on the Price/Earnings ratio, GILD is valued cheaper than 97.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.22. GILD is valued rather cheaply when compared to this.
GILD is valuated correctly with a Price/Forward Earnings ratio of 12.10.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GILD indicates a rather cheap valuation: GILD is cheaper than 96.29% of the companies listed in the same industry.
GILD's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.86.
Industry RankSector Rank
PE 13.4
Fwd PE 12.1
GILD Price Earnings VS Forward Price EarningsGILD Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

GILD's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GILD is cheaper than 97.17% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GILD is valued cheaply inside the industry as 97.00% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 12.53
EV/EBITDA 10.68
GILD Per share dataGILD EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GILD has an outstanding profitability rating, which may justify a higher PE ratio.
GILD's earnings are expected to grow with 25.40% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.18
PEG (5Y)N/A
EPS Next 2Y36.32%
EPS Next 3Y25.4%

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6

5. Dividend

5.1 Amount

GILD has a Yearly Dividend Yield of 3.06%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 52.28, GILD pays a better dividend. On top of this GILD pays more dividend than 98.59% of the companies listed in the same industry.
GILD's Dividend Yield is a higher than the S&P500 average which is at 2.44.
Industry RankSector Rank
Dividend Yield 3.06%

5.2 History

The dividend of GILD has a limited annual growth rate of 4.45%.
GILD has paid a dividend for at least 10 years, which is a reliable track record.
As GILD did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)4.45%
Div Incr Years9
Div Non Decr Years9
GILD Yearly Dividends per shareGILD Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 2 3

5.3 Sustainability

GILD pays out 816.25% of its income as dividend. This is not a sustainable payout ratio.
GILD's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP816.25%
EPS Next 2Y36.32%
EPS Next 3Y25.4%
GILD Yearly Income VS Free CF VS DividendGILD Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B
GILD Dividend Payout.GILD Dividend Payout, showing the Payout Ratio.GILD Dividend Payout.PayoutRetained Earnings

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