Biotech leader Gilead Sciences GILD made headlines on Wednesday, with its stock spiking nearly 6% after delivering favorable Q4 results yesterday evening.
Thanks to its durable drug pipeline for HIV and liver disease, Gilead's stock has been on a captivating ascension in the last two years, producing gains of +100% and hitting an all-time high of $157 a share in today’s trading session.
Gilead’s Favorable Q4 results
Gilead posted Q4 sales of $7.92 billion, a 5% increase from $7.56 billion in the comparative quarter and topping estimates of $7.57 billion. HIV franchise sales grew 6%, driven by strong demand for prevention and treatment products like Biktarvy and Descovy, with liver disease revenue rising 17%, led by Livdelzi.
Net income for the quarter came in at $2.2 billion or adjusted EPS of $1.86, edging expectations of $1.83 despite a decline from $1.90 per share a year ago.
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Full Year Results & Guidance
The spark behind Gilead’s post-earnings rally was that FY25 EPS spiked 76% to $8.15 compared to $4.62 per share in 2024. Furthermore, annual sales increased over 2% to $29.44 billion.
Offering full-year guidance for FY26, Gilead expects annual sales in a range of $29.6-$30 billion, which was slightly beneath Wall Street’s estimates of $30.04 billion or 2% growth. However, the top end of Gilead’s FY26 EPS Guidance ($8.45-$8.85) came in above the street’s expectations of $8.61 or 5% growth.
GILD is a Top Value Stock
Despite such an extensive rally, Gilead’s valuation may still be attracting investors at 17X forward earnings. Trading at a nice P/E discount to the benchmark S&P 500, this is also nicely beneath its Zacks Medical-Biomedical and Genetics Industry average of 19X forward earnings.
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The pharmaceutical giant also offers a 2.15% annual dividend yield as opposed to the S&P 500’s 1.07% average, while many of its industry peers don’t offer a payout.
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Gilead’s Intriguing ROIC
What may be most compelling to investors is that Gilead has shown a nice ability to turn invested capital into profits, one of the clearest indicators of long-term shareholder value.
With the admirable level being 20% or higher, Gilead’s return on invested capital (ROIC) is currently at 24%. It’s noteworthy that many other biopharmaceutical companies have an ROIC percentage closer to the mid-teens or single digits because of the immense R&D investment that is required.
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Bottom Line
Following favorable Q4 results, Gilead Sciences' stock currently lands a Zacks Rank #3 (Hold). GILD is certainly an intriguing option for long-term investors looking for value and income in the portfolio. That said, the plausibility of higher highs for GILD will likely depend on what is hopefully a sharper uptick in FY26 EPS revisions.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
