Gilead Sciences (GILD): Evaluating Valuation After Raised Outlook and Strong Q3 Results

Gilead Sciences (GILD) released its third-quarter results showing year-over-year gains in both revenue and net income. The company also raised its full-year earnings guidance for 2025. Investor attention has turned to Gilead’s positive earnings trend and management’s outlook.

See our latest analysis for Gilead Sciences.

After a series of upbeat developments, including a raised earnings outlook, robust quarterly results, and new data for its pipeline therapies, Gilead’s share price continued to climb, gaining over 33% year-to-date and delivering a stellar 40% total shareholder return in the past twelve months. Strong momentum, fueled by both financial strength and product progress, has reinforced investor optimism for the longer-term trajectory.

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After such a strong run and a series of positive surprises, is Gilead's current valuation still attractive? Or has the recent rally already captured the company's future growth potential and left little room for upside?

Most Popular Narrative: 3.3% Undervalued

Gilead Sciences is trading just below the most popular fair value estimate, suggesting its recent surge has not fully closed the gap. The narrative weighs both impressive operational results and forward growth assumptions in arriving at its valuation.

The launch and scaling of innovative products (Yeztugo, Trodelvy first-line, Livdelzi) position Gilead to deliver a more favorable product mix and premium pricing. This drives higher gross margins and improves the long-term earnings trajectory as portfolio diversification reduces overexposure to legacy products.

Read the complete narrative.

Want to know what future financial leaps underpin this price tag? The surprising assumptions driving this narrative hinge on bold pipeline launches and higher profitability. Craving details on what the analysts believe is possible? Dive in and see how Gilead’s innovation could rewrite its growth story.

Result: Fair Value of $127.23 (UNDERVALUED)

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

However, future policy-driven drug pricing changes or setbacks in Gilead’s clinical pipeline could quickly shift the outlook and reduce current growth expectations.

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

Another View: Look Through the Lens of Market Multiples

Taking a step back from fair value estimates, Gilead’s price-to-earnings ratio of 18.8x is higher than the average for its U.S. biotech industry peers at 17x but remains far below the peer group average of 57.4x. The current ratio is also well below the fair ratio of 26.9x, which suggests the market could one day re-rate Gilead’s shares. Does this gap point to lingering skepticism or pave the way for a valuation catch-up?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Gilead Sciences Narrative

If you have a different perspective or want to dig into the numbers yourself, you can craft your own data-driven narrative 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 1 important warning sign 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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