Buy, Sell, Or Hold GILD Stock?

June 18th, 2025 by Trefis Team
GILD: Gilead Sciences logo
GILD
Gilead Sciences

Despite a recent setback involving an FDA clinical hold on its HIV treatment trials (GS-1720 and GS-4182) due to declines in CD4+ T-cell counts, Gilead Sciences (NASDAQ:GILD) has posted a strong year-to-date performance, with its stock rising 18% compared to the S&P 500’s modest 2% gain. The company is actively working with regulators to resolve the issue and continues to prioritize profitability improvements.

Gilead has a deep pipeline, with 16 programs currently in late-stage clinical development. The stock’s current valuation, around $110 per share, seems reasonable and suggests room for potential upside. Our detailed evaluation—factoring in Growth, Profitability, Financial Stability, and Downturn Resilience—shows Gilead to be fundamentally solid. For investors seeking upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative. This portfolio has outperformed the S&P 500 and delivered cumulative returns of over 91% since inception. For more insights, see – SoundHound AI: Buy, Sell Or Hold SOUN Stock At $10?

Image by HeungSoon from Pixabay

Valuation: How Does Gilead Stock Stack Up Against the S&P 500?

Based on key valuation ratios, GILD stock appears slightly undervalued compared to the broader market:

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  • Price-to-Sales (P/S) Ratio: Gilead has a P/S ratio of 4.8, versus 3.1 for the S&P 500.
  • Price-to-Free Cash Flow (P/FCF) Ratio: Gilead’s P/FCF is 14.0, considerably lower than the S&P 500’s 20.9.
  • Price-to-Earnings (P/E) Ratio: Gilead’s P/E ratio stands at 23.2, compared to 26.9 for the S&P 500.

Revenue Growth: A Look at Recent Trends

Gilead Sciences’ revenues have shown modest growth in recent years:

  • Over the past three years, Gilead’s revenue has grown at an average annual rate of 1.5%, compared to 5.5% for the S&P 500.
  • In the last 12 months, revenue increased by 4.7% from $27 billion to $29 billion—slightly below the S&P 500’s 5.5% growth.
  • Most recently, quarterly revenue dipped 0.3% year-over-year to $6.7 billion, while the S&P 500 saw a 4.8% rise.

Profitability: A Key Strength

Gilead stands out with superior margins compared to many peers:

  • Operating Margin: Gilead’s Operating income over the last four quarters totaled $11 billion, translating to a 37.4% operating margin.
  • Operating Cash Flow (OCF) Margin: Gilead’s OCF for the same period was $10 billion, yielding a 36.1% margin—well above the S&P 500’s 14.9%.
  • Net Income Margin: Gilead’s Net income was $6.0 billion, giving a 20.8% net margin, compared to the S&P 500’s 11.6%.

Financial Stability: A Strong Balance Sheet

Gilead maintains a healthy financial position:

  • Debt-to-Equity Ratio: As of the latest quarter, Gilead held $25 billion in debt and a $135 billion market cap (as of June 17, 2025), equating to a Debt-to-Equity Ratio of 18.1%, better than the S&P 500’s 19.4%.
  • Cash-to-Assets Ratio: With $7.9 billion in cash against $56 billion in total assets, Gilead’s Cash-to-Assets Ratio is a solid 14.0%.

Downturn Resilience: Gilead Stock’s Performance During Market Crashes

GILD stock has outperformed the S&P 500 during several major market corrections. For more details, see our dashboard here and “How Low Can Gilead Sciences Stock Go In A Market Crash?“.

Inflation Shock (2022):

  • From December 29, 2021, to March 10, 2022, GILD declined 21.3%, while the S&P 500 dropped 25.4%.
  • It rebounded by October 28, 2022. Since then, the stock peaked at $117.41 on March 9, 2025, and now trades around $110.

COVID-19 Pandemic (2020):

  • GILD declined 32.6% from April 30, 2020, to December 30, 2020, versus a 33.9% drop in the S&P 500.
  • It recovered its pre-crisis levels by November 21, 2022.

Global Financial Crisis (2008):

  • GILD fell 34.4% from August 12 to October 10, 2008, outperforming the S&P 500’s 56.8% plunge.
  • The stock returned to its previous high by August 2, 2012.

Putting All The Pieces Together: What It Means For Gilead Stock

Overall, Gilead performs strongly across our core evaluation categories:

  • Growth: Neutral
  • Profitability: Very Strong
  • Financial Stability: Strong
  • Downturn Resilience: Strong
  • Overall: Strong

Given its well-developed pipeline, favorable financial metrics, and reasonable valuation, Gilead appears to offer a compelling investment case at current levels. Still, investing in individual stocks carries inherent risks. For broader exposure with less volatility, the Trefis High Quality (HQ) Portfolio—consisting of 30 stocks—has consistently outperformed the S&P 500 over the past four years. Why? HQ Portfolio stocks tend to offer better returns with lower volatility than the broader market, as shown in HQ Portfolio performance metrics.

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