What Should You Know About Gilead Sciences Inc’s (NASDAQ:GILD) Future?

In March 2018, Gilead Sciences Inc (NASDAQ:GILD) released its most recent earnings update. Generally, the consensus outlook from analysts appear highly confident, as a 90.49% rise in profits is expected in the upcoming year, against the past 5-year average growth rate of 21.55%. Currently with earnings of US$4.63b, we can expect this to reach US$8.82b by 2019. Below is a brief commentary on the longer term outlook the market has for Gilead Sciences. For those interested in more of an analysis of the company, you can research its fundamentals here. Check out our latest analysis for Gilead Sciences

Exciting times ahead?

The longer term view from the 22 analysts covering GILD is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of GILD’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
NasdaqGS:GILD Future Profit July 11th 18
NasdaqGS:GILD Future Profit July 11th 18
From the current net income level of US$4.63b and the final forecast of US$10.68b by 2021, the annual rate of growth for GILD’s earnings is 10.51%. This leads to an EPS of $6.21 in the final year of projections relative to the current EPS of $3.54. Growth in earnings appears to be a result of reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 17.73%, which is expected to expand to 45.67% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Gilead Sciences, I’ve compiled three pertinent factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Gilead Sciences worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Gilead Sciences is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Gilead Sciences? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!