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GILD Fundamental Analysis
GILD Earnings Analysis
Positive
Strong Revenue Performance: Gilead's third quarter results highlight strong year-over-year revenue performance across HIV, Oncology, and Liver Disease, including 9% growth in HIV.
Product Sales Growth: Total product sales, excluding Veklury, were $6.8 billion in the third quarter, up 7% year-over-year, reflecting strong growth across HIV, Oncology, and Liver Disease.
HIV Sales Increase: HIV sales of $5.1 billion were up 9% year-over-year and 7% sequentially, primarily driven by higher average realized price due to shifts in channel mix and higher demand across treatment and PrEP.
Biktarvy Sales Surge: Biktarvy third quarter sales of $3.5 billion increased 13% year-over-year, driven by higher demand as well as higher average realized price due to shifts in channel mix.
Strong 2024 Product Sales: Gilead is on track to deliver an extremely strong 2024, with expectations for full-year product sales in the range of $27.8 billion to $28.1 billion, an increase of $650 million at the midpoint compared to the prior range.
Negative
Strong Product Sales Growth: Total product sales, excluding Veklury, were $6.8 billion in the third quarter, reflecting a strong growth across HIV, Oncology, and Liver Disease.
Sales Growth Analysis: Sales of $5.1 billion were up 9% year-over-year and 7% sequentially, primarily driven by higher average realized price due to shifts in channel mix and higher demand across treatment and PrEP.
HIV Pricing Variability: The third quarter once again demonstrated the quarterly pricing variability we see in HIV, reflecting more favorable average realized pricing.
HIV Sales Growth Update: Year-to-date, HIV sales have grown 5%, well above our prior full-year growth target of 4%.
Operating Margin Analysis: The third quarter operating margin was 43%, excluding the impact of the royalty buyout charge from Janssen, operating margin would have been 47%.
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Analysis and Insights
Based on the analysis of Gilead Sciences Inc (GILD), the stock presents a compelling opportunity for investors due to its strong fundamental momentum and positive market sentiment.
Fundamental Analysis:
Gilead Sciences has received a 100% rating from Validea's Twin Momentum Investor model, indicating strong interest based on its fundamental and price momentum in the Biotechnology & Drugs industry. The company has shown resilience with its HIV franchise and pipeline advancements, including the FDA approval of Amvuttra for cardiomyopathy associated with transthyretin-mediated amyloidosis (ATTR-CM). This approval positions Gilead as a leader in treating ATTR-CM and hATTR-PN, further solidifying its position in the market.
Market Sentiment and Analyst Ratings:
Analysts have raised their price targets for Gilead, with a consensus rating of "Buy" and an average price target of $115. The stock has shown strong performance, with a year-to-date gain of 14.6% and consistent earnings beats in recent quarters. The positive sentiment is further supported by the company's strong financial guidance for 2025, indicating confidence in its growth prospects.
Technical Analysis:
From a technical perspective, Gilead's stock is trading near its Fibonacci pivot level of $112, with resistance levels at $117.83 and $121.43. The stock is currently undervalued based on its Fibonacci analysis, presenting a potential buying opportunity for investors.
Conclusion:
Given the strong fundamental momentum, positive analyst sentiment, and undervalued technical position, Gilead Sciences (GILD) is a buy. The company's pipeline strength and market leadership position it well for future growth.
