A Look at Gilead Sciences (GILD) Valuation After Landmark EU Approval for Twice-Yearly HIV Prevention Therapy

Gilead Sciences (GILD) just scored a major regulatory win: the European Commission has granted marketing authorization for lenacapavir, branded as Yeytuo. This makes it the first twice-yearly injectable PrEP option for HIV-1 prevention across the EU and select neighboring countries. This approval puts Gilead at the forefront of HIV prevention innovation and extends its reach into a market with substantial unmet need. The news follows recent FDA approval in the US and updated World Health Organization guidelines, further establishing lenacapavir’s position as a significant addition to the company’s HIV portfolio.

Over the past year, Gilead’s shares have climbed 54%, with a sustained rally picking up pace again in the past three months. That momentum reflects investor optimism fueled by steady revenue and net income growth, as well as the expanding footprint of the company’s long-acting HIV pipeline. Outside of HIV, Gilead continues to advance multiple late-stage studies and has recently made leadership changes that could strengthen its financial oversight in coming quarters. So far, the attention surrounding lenacapavir’s commercial prospects is giving Gilead renewed relevance among biotech peers.

The big question now is whether the stock’s current price truly reflects potential upside from this approval, or if all expected future growth is already factored in. Could this recent move be the entry point some investors have been waiting for, or is it time to stay on the sidelines?

Most Popular Narrative: 7.3% Undervalued

According to community narrative, analysts believe Gilead Sciences is undervalued by 7.3% based on future revenue, profit margin, and growth assumptions. Their fair value estimate considers new products, risk factors, and the company’s innovation pipeline.

Disciplined operating expense management and expanded share buybacks, backed by strong free cash flow, are increasing efficiency and supporting progressively higher operating margins and EPS growth. Updated guidance reflects confidence in operating leverage and capital returns.

Want to uncover the financial fuel powering this bullish view? This narrative leans on bold growth bets and a premium profit forecast, yet some critical numbers remain unseen. Just how optimistic are the consensus projections that drive the gap between the current price and fair value? There is a method behind this valuation magic. What metrics tip the balance so sharply in Gilead’s favor? The answers lie just beneath the surface.

Result: Fair Value of $123.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as tougher pricing policies or unexpected competition could limit Gilead’s upside. This makes future projections less certain than current optimism suggests.

Find out about the key risks to this Gilead Sciences narrative.

Another View: Discounted Cash Flow Tells a Different Story

While analyst targets suggest Gilead shares are undervalued, our DCF model reaches a far higher estimate for fair value based on future cash flows. How much weight should this alternate outlook carry in light of today’s optimism?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Gilead Sciences for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Gilead Sciences Narrative

If you would rather draw your own conclusions or follow a different perspective, you can craft your own Gilead story in just a few minutes. Do it your way

A great starting point for your Gilead Sciences research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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