1. No category

February 4, 2015
NASDAQ: GILD
GILEAD SCIENCES INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
NA
B-
C+
C
Annual Dividend Yield
NA
SELL
C-
D+
Beta
0.75
Sector: Health Care
GILD BUSINESS DESCRIPTION
Gilead Sciences, Inc., a biopharmaceutical
company, discovers, develops, and commercializes
medicines for the treatment of life threatening
diseases in North America, South America, Europe,
and the Asia-Pacific.
STOCK PERFORMANCE (%)
3 Mo.
Price Change
-2.55
1 Yr.
35.96
3 Yr (Ann)
57.66
Last Qtr
134.43
340.60
363.82
12 Mo.
122.19
293.56
303.27
3 Yr CAGR
43.71
62.82
60.80
RETURN ON EQUITY (%)
GILD
Q4 2014
76.49
Q4 2013
26.89
Q4 2012
27.83
Ind Avg
22.41
20.10
0.53
S&P 500
14.59
13.97
13.23
D
D-
E+
E
E-
F
BUY
Market Capitalization
$161.7 Billion
Sub-Industry: Biotechnology
Weekly Price: (US$)
SMA (50)
52-Week Range
$63.50-$116.83
RATING SINCE
TARGET PRICE
07/27/2011
$140.67
Price as of 2/3/2015
$107.18
Source: S&P
SMA (100)
1 Year
2 Years
150
TARGET
PRICE
$140.67
TARGET
TARGETPRICE
PRICE$140.67
$140.67
125
100
75
50
GROWTH (%)
Revenues
Net Income
EPS
25
Rating History
BUY
Volume in Millions
200
100
2013
2014
2015
0
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON
RECOMMENDATION
We rate GILEAD SCIENCES INC (GILD) a BUY. This is based on the convergence of positive investment
measures, which should help this stock outperform the majority of stocks that we rate. The company's
strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity,
attractive valuation levels, expanding profit margins and solid stock price performance. Although no
company is perfect, currently we do not see any significant weaknesses which are likely to detract from the
generally positive outlook.
14.52
77.27
19.35
GILD
Ind Avg
S&P 500
HIGHLIGHTS
GILD's very impressive revenue growth greatly exceeded the industry average of 43.1%. Since the same
quarter one year prior, revenues leaped by 134.4%. Growth in the company's revenue appears to have helped
boost the earnings per share.
EPS ANALYSIS¹ ($)
2012
2013
Q4 2.18
Q3 1.67
Q2 2.20
Q1 1.33
Q4 0.47
Q3 0.47
Q2 0.46
Q1 0.43
Q4 0.47
Q3 0.43
Q2 0.46
Q1 0.29
The company's current return on equity greatly increased when compared to its ROE from the same quarter
one year prior. This is a signal of significant strength within the corporation. Compared to other companies in
the Biotechnology industry and the overall market, GILEAD SCIENCES INC's return on equity significantly
exceeds that of both the industry average and the S&P 500.
2014
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
The gross profit margin for GILEAD SCIENCES INC is currently very high, coming in at 85.47%. It has increased
from the same quarter the previous year. Along with this, the net profit margin of 47.67% significantly
outperformed against the industry average.
Powered by its strong earnings growth of 363.82% and other important driving factors, this stock has surged
by 35.96% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to
the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the
stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 4, 2015
PAGE 1
February 4, 2015
NASDAQ: GILD
GILEAD SCIENCES INC
Sector: Health Care Biotechnology Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
PEER GROUP ANALYSIS
350%
PCYC
V
FA
AB
OR
R
VO
FA
LE
AB
-100%
UN
Revenue Growth (TTM)
LE
REGN INCY
-30%
Market Capitalization
$161.7 Billion
52-Week Range
$63.50-$116.83
Price as of 2/3/2015
$107.18
INDUSTRY ANALYSIS
The biotechnology industry employs biological and biochemical knowledge to develop, manufacture and
trade products and processes for the diagnosis and treatment of diseases and ailments. It also develops
genetically modified plant and animal species and food varieties. The industry has a noncyclical growth
profile, which is insensitive to overall economic conditions. The industry focuses on specialty markets with
primary sales and efforts targeted towards specialists such as hematologists, oncology physicians,
rheumatologists and dermatologists. Consequently, the industry is highly reliant on research and
development (R&D). US biotech companies dominating the market include larger players like Amgen (AMGN),
Gilead (GILD) and Biogen (BIIB).
REVENUE GROWTH AND EBITDA MARGIN*
BMRN
Beta
0.75
50%
Medical spending is expected to grow significantly in the coming quarters due to an aging population,
increasing obesity and demand for quality treatment. Healthcare service providers have shown a willingness
to incur higher costs to treat diseases and this supports margin expansion for successful treatments. US
healthcare spending for the next decade is expected to be around $4.2 trillion or 20% of GDP.
The biotechnology pipeline has become an important consideration for the pharmaceutical industry and its
suppliers. The industry has witnessed an increase in financing and multi-billion-dollar mergers and
acquisitions. R&D spending remains robust. The US continues to dominate in R&D spending, with
approximately 81 cents of global expenditures being domestic.
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $12.2 Billion and $161.7
Billion. Companies with NA or NM values do not
appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
PEER GROUP: Biotechnology
350%
REVENUE GROWTH AND EARNINGS YIELD
PCYC
V
FA
AB
OR
LE
R
VO
FA
VRTX
ALXN
BIIB
INCY
REGN
CELG
GRFS
AMGN
LE
AB
-100%
UN
Revenue Growth (TTM)
GILD
BMRN
-3%
An average drug takes about 10 to 15 years from pre-clinical development to market approval. According to
the FDA, for every 20 drugs that enter the clinical testing stage, only a few pass trial and gain approval. The
traditional sales and profit metrics do not completely reveal the biotech companies’ otherwise lengthy,
cost-intensive product-development periods. It is essential for investors to consider the number of products
the biotech companies have in their pipeline, the time necessary for development and the potential market
size of drugs. Patents held, effectiveness of these patents to protect market share, cash position, and current
leverage position all impact biotech company outlook. Finally, R&D effectiveness, management competency
and potential synergies from new or proposed M&A activities are important factors for investors to consider.
7%
Ticker
GILD
CELG
BIIB
REGN
ALXN
VRTX
BMRN
GRFS
INCY
PCYC
AMGN
Recent
Company Name
Price ($)
GILEAD SCIENCES INC
107.18
CELGENE CORP
117.60
BIOGEN IDEC INC
393.89
REGENERON PHARMACEUTICALS 409.20
ALEXION PHARMACEUTICALS IN 177.51
VERTEX PHARMACEUTICALS INC 108.72
BIOMARIN PHARMACEUTICAL INC 92.76
GRIFOLS SA
34.60
INCYTE CORP
75.96
PHARMACYCLICS INC
161.23
AMGEN INC
152.23
Market
Cap ($M)
161,699
93,928
93,019
40,794
35,198
26,285
14,583
13,459
12,833
12,179
115,695
Price/
Earnings
14.52
49.00
31.79
138.24
54.45
NM
NM
22.18
NM
147.92
22.72
Net Sales
TTM ($M)
24,889.73
7,670.40
9,703.32
2,627.64
2,233.73
580.42
667.06
4,086.63
484.59
563.09
20,063.00
Net Income
TTM ($M)
12,101.28
1,999.90
2,934.78
334.70
656.91
-738.56
-126.16
542.77
-54.41
86.88
5,158.00
The peer group comparison is based on Major Biotechnology companies of comparable size.
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -52.1% and
312.2%. Companies with NA or NM values do not
appear.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 4, 2015
PAGE 2
February 4, 2015
NASDAQ: GILD
GILEAD SCIENCES INC
Sector: Health Care Biotechnology Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
COMPANY DESCRIPTION
Gilead Sciences, Inc., a biopharmaceutical company,
discovers, develops, and commercializes medicines for
the treatment of life threatening diseases in North
America, South America, Europe, and the Asia-Pacific.
The company's products include Stribild,
Complera/Eviplera, Atripla, Truvada, Viread, Emtriva,
Tybost, and Vitekta for the treatment of human
immunodeficiency virus (HIV) infection in adults; and
Sovaldi, Viread, and Hepsera products for the treatment
of liver disease. It also offers Letairis, an endothelin
receptor antagonist for the treatment of pulmonary
arterial hypertension; Ranexa, a tablet used for the
treatment of chronic angina; Lexiscan/Rapiscan injection
for use as a pharmacologic stress agent in radionuclide
myocardial perfusion imaging; Cayston, an inhaled
antibiotic for the treatment of respiratory systems in
cystic fibrosis patients; and Tamiflu, an oral antiviral
capsule for the treatment and prevention of influenza A
and B. In addition, the company provides other products,
such as AmBisome, an antifungal agent to treat serious
invasive fungal infections; Vistide, an antiviral injection
for the treatment of cytomegalovirus retinitis in adult
patients with AIDS; and Macugen, an anti-angiogenic
oligonucleotide to treat neovascular age-related macular
degeneration. Further, it has product candidates in
various stages for the treatment of HIV, liver,
oncology/inflammation, cardiovascular, and respiratory
diseases. The company markets its products through its
commercial teams and/or in conjunction with third-party
distributors and corporate partners. Gilead Sciences, Inc.
has collaborations with BMS, Janssen, and Japan
Tobacco to develop and commercialize various products.
The company was founded in 1987 and is headquartered
in Foster City, California.
GILEAD SCIENCES INC
333 Lakeside Drive
Foster City, CA 94404
USA
Phone: 650-574-3000
Fax: 650-578-9264
http://www.gilead.com
Beta
0.75
Market Capitalization
$161.7 Billion
52-Week Range
$63.50-$116.83
Price as of 2/3/2015
$107.18
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of GILD shares. It is provided in order to give you a deeper understanding of our
rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
5.0
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, GILD has a growth score better than 90% of
the stocks we rate.
strong
3.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 60% of the companies we
cover.
strong
5.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 90% of the companies we review.
strong
4.5
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 80% of the stocks we monitor.
strong
5.0
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 90% of the companies we analyze.
strong
0.5
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. This company
pays no dividends.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 4, 2015
PAGE 3
February 4, 2015
NASDAQ: GILD
GILEAD SCIENCES INC
Sector: Health Care Biotechnology Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
Beta
0.75
Market Capitalization
$161.7 Billion
52-Week Range
$63.50-$116.83
Price as of 2/3/2015
$107.18
FINANCIAL ANALYSIS
GILEAD SCIENCES INC's gross profit margin for the fourth quarter of its fiscal year 2014 has increased when
compared to the same period a year ago. The company has grown sales and net income significantly,
outpacing the average growth rates of competitors within its industry.
At the same time, stockholders' equity ("net worth") has greatly increased by 38.36% from the same quarter
last year.
2.48
9.84 E
11.07 E
Q1 FY15
2015(E)
2016(E)
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q4 FY14
7,314.00
NA
4,436.00
3,487.00
Q4 FY13
3,119.83
1,314.37
1,208.27
791.41
Q4 FY14
11,726.00
34,664.00
NA
15,819.00
Q4 FY13
2,131.56
22,496.79
6,635.68
11,432.90
Q4 FY14
85.47%
NA
60.65%
0.72
34.91%
76.49%
Q4 FY13
75.91%
42.12%
38.73%
0.50
13.66%
26.89%
Q4 FY14
NA
NA
130.00
34.12
Q4 FY13
1.15
0.37
73.15
16.52
Q4 FY14
1,514
0.00
2.18
10.45
NA
17,207,218
Q4 FY13
1,534
0.00
0.47
7.45
NA
14,700,830
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 4, 2015
PAGE 4
February 4, 2015
NASDAQ: GILD
GILEAD SCIENCES INC
Sector: Health Care Biotechnology Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
RATINGS HISTORY
Our rating for GILEAD SCIENCES INC has not
changed since 7/27/2011. As of 2/3/2015, the stock
was trading at a price of $107.18 which is 8.3%
below its 52-week high of $116.83 and 68.8% above
its 52-week low of $63.50.
2 Year Chart
Beta
0.75
BUY: $40.56
$120
Price/Earnings
$80
$60
52-Week Range
$63.50-$116.83
1
2
3
premium
4
5
GILD 14.52
Peers 77.27
• Discount. A lower P/E ratio than its peers can
signify a less expensive stock or lower growth
expectations.
• GILD is trading at a significant discount to its peers.
Price/Projected Earnings
1
2
3
premium
From
Buy
To
Buy
Price reflects the closing price as of the date listed, if available
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
(as of 2/3/2015)
29.83% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
22.81% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
5
1
2
3
4
5
Price/Sales
1
2
premium
3
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
GILD 0.03
Peers 0.60
• Discount. The PEG ratio is the stock’s P/E divided
by the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• GILD trades at a significant discount to its peers.
Earnings Growth
1
2
3
4
lower
5
higher
GILD 303.27
Peers 142.39
• Higher. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• GILD is expected to have an earnings growth rate
that significantly exceeds its peers.
Sales Growth
discount
GILD 6.52
Peers 197.06
• Discount. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• GILD is trading at a significant discount to its
industry on this measurement.
3
GILD NA
Peers 40.74
• Neutral. The P/CF ratio is the stock’s price divided
by the sum of the company's cash flow from
operations. It is useful for comparing companies
with different capital requirements or financing
structures.
• Ratio not available.
discount
GILD 10.26
Peers 11.64
• Discount. A lower price-to-book ratio makes a
stock more attractive to investors seeking stocks
with lower market values per dollar of equity on the
balance sheet.
• GILD is trading at a discount to its peers.
2
premium
discount
premium
47.36% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
4
GILD 9.69
Peers 26.10
• Discount. A lower price-to-projected earnings ratio
than its peers can signify a less expensive stock or
lower future growth expectations.
• GILD is trading at a significant discount to its peers.
Price/Book
1
Price/CashFlow
discount
2014
MOST RECENT RATINGS CHANGES
Date
Price
Action
2/1/13
$40.56 No Change
Price as of 2/3/2015
$107.18
VALUATION
BUY. The current P/E ratio indicates a significant discount compared to an average of 77.27 for the
Biotechnology industry and a discount compared to the S&P 500 average of 19.35. For additional comparison,
its price-to-book ratio of 10.26 indicates a significant premium versus the S&P 500 average of 2.73 and a
discount versus the industry average of 11.64. The price-to-sales ratio is well above the S&P 500 average, but
well below the industry average. Upon assessment of these and other key valuation criteria, GILEAD
SCIENCES INC proves to trade at a discount to investment alternatives within the industry.
$100
2013
Market Capitalization
$161.7 Billion
1
2
3
lower
4
5
higher
GILD 122.19
Peers 79.29
• Higher. A sales growth rate that exceeds the
industry implies that a company is gaining market
share.
• GILD has a sales growth rate that significantly
exceeds its peers.
DISCLAIMER:
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 4, 2015
PAGE 5