Gilead Stock Rises 8% Post Q4 Earnings: Should You Buy or Sell?

Core Viewpoint - Gilead Sciences, Inc. reported strong fourth-quarter results, exceeding expectations in both earnings and revenue, driven by robust product sales, particularly in HIV, oncology, and liver disease treatments [1][2]. Financial Performance - Adjusted earnings per share (EPS) for the fourth quarter were $1.90, surpassing the Zacks Consensus Estimate of$ 1.67 and up from $1.72 in the same quarter last year [1]. - Total revenues reached$ 7.6 billion, exceeding the Zacks Consensus Estimate of $7.1 billion, marking a 6% year-over-year increase [2]. Product Sales and Guidance - The increase in revenues was primarily attributed to higher sales in HIV, oncology, and liver disease drugs [2]. - Gilead's guidance for product sales is projected between$ 28.2 billion and $28.6 billion, with adjusted EPS anticipated in the range of$ 7.70- $8.10 [2]. Market Position and Growth Drivers - Gilead holds a market-leading position in HIV treatments, with over 50% market share in the U.S. for its flagship therapy, Biktarvy [4]. - The company’s HIV franchise has shown consistent growth over the past three years, contributing significantly to revenue [4]. Innovation and Pipeline - Gilead's pipeline includes lenacapavir, which has shown 100% efficacy for HIV prevention in cisgender women, and is under review for approval by the FDA and EMA [5][6]. - The approval of seladelpar for primary biliary cholangitis (PBC) strengthens Gilead's liver disease portfolio, following its acquisition of CymaBay Therapeutics for$ 4.3 billion [7][8]. Strategic Partnerships - Gilead has formed strategic partnerships, including one with LEO Pharma to enhance its inflammation research portfolio [10]. - Collaborations with Merck to evaluate investigational combinations for HIV treatment are ongoing, showing promising results [20]. Stock Performance and Valuation - Gilead's shares have increased by 51.3% over the past year, outperforming the industry and the S&P 500 [16]. - The current price/earnings ratio is 13.27x forward earnings, lower than the large-cap pharma industry's average of 16.39x [16]. Dividend and Financial Health - The company announced a 2.6% increase in its quarterly cash dividend, effective in Q1 2025, resulting in a quarterly dividend of 79 cents per share [21]. - Gilead's strong cash position, with $10 billion in cash and equivalents as of December 31, 2024, supports its current yield of 2.96% [22].