Gilead Sciences Q3 Earnings: Can NasdaqGS:GILD Hit Its $1.92 EPS Target?

in EARNINGS/INVESTING IDEAS by

Gilead Sciences, Inc. (NasdaqGS:GILD) is scheduled to report Q3 earnings results after markets close for trading on October 28, 2020.

The company is expected to report earnings of $1.92/share on revenue of $6.329 billion. The consensus earnings per share (EPS) of $1.92/share is based on a poll of 27 analysts and represents a growth in eps of 9.5% over the same quarter last year, when the company reported earnings of $1.75/share.

The revenue forecast of $6.329 billion based on a poll of 24 analysts implies a year-over-year (YoY) growth in revenue of 12.9%. Last year the company reported $5.604 billion in revenue for the quarter.

Expected to report EPS growth of 9.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $6,329.21 $5,604.00 12.9%
EPS $1.92 $1.75 9.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Gilead Sciences, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.45 $1.11 −23.4% Missed
Q1, 2020 $1.56 $1.68 7.5% Beat
Q4, 2019 $1.67 $1.30 −22.3% Missed
Q3, 2019 $1.73 $1.75 1.0% Beat
Q2, 2019 $1.71 $1.82 6.4% Beat
Q1, 2019 $1.60 $1.76 9.8% Beat
Q4, 2018 $1.69 $1.44 −15.0% Missed
Q3, 2018 $1.63 $1.84 13.1% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −4.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $73.01 $69.53 −4.8% Decline
April 30, 2020 $83.14 $79.95 −3.8% Decline
February 4, 2020 $66.36 $65.87 −0.7% Decline
October 24, 2019 $66.58 $63.32 −4.9% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.38, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.38 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Gilead Sciences, Inc. is currently trading at $60.55/share, down 0.0% for the day. The company is trading at approximately 70.4% of its 52-week high of $85.97/share. The company’s stock price is down −12.9% since the last earnings report and down −5.5% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 33.37 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:GILD Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −295.38 and a forward P/E multiple of 8.78.

Gilead Sciences, Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.21. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $60.55
P/E Ratio −295.4x
P/E Ratio (Fwd) 8.8x
PEG Ratio 2.8
Total Debt / Total Capital 24.1%
Levered Free Cash Flow $8.51 billion
EV / EBITDA 13.5x

Finbox

Gilead Sciences, Inc. is a large-cap stock with a market capitalization of $75.913 billion and a total enterprise value of $80.765 billion. The company operates in the Healthcare sector and the Biotechnology industry.

Gilead Sciences, Inc., a research-based biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical needs in the United States, Europe, and internationally. The company’s products include Biktarvy, Descovy, Odefsey, Genvoya, Stribild, Complera/Eviplera, Atripla, and Truvada for the treatment of human immunodeficiency virus (HIV) infection; and Vosevi, Vemlidy, Epclusa, Harvoni, and Viread products for treating liver diseases. It also provides Yescarta, a chimeric antigen receptor T cell therapy for adult patients with relapsed or refractory large B-cell lymphoma; Zydelig, a kinase inhibitor; Letairis, an oral formulation of an endothelin receptor antagonist for pulmonary arterial hypertension; Ranexa, a tablet to treat chronic angina; and AmBisome, an antifungal agent to treat serious invasive fungal infections. In addition, the company offers its products under the name Cayston, Emtriva, Hepsera, Sovaldi, and Tybost. Further, it develops product candidates for the treatment of viral diseases, inflammatory and fibrotic diseases, and oncology. The company markets its products through its commercial teams; and in conjunction with third-party distributors and corporate partners. Gilead Sciences, Inc. has collaboration agreements with Bristol-Myers Squibb Company; Janssen Sciences Ireland UC; Japan Tobacco Inc.; Galapagos NV; Second Genome; Gadeta; Carna Biosciences Inc.; Nurix Therapeutics, Inc.; Humanigen, Inc.; Kiniksa Pharmaceuticals, Ltd.; Kyverna Therapeutics, Inc.; Glympse Bio, Inc.; Renown Institute for Health Innovation; Goldfinch Bio, Inc.; Insitro, Inc.; Novo Nordisk A/S; Yuhan Corporation; Kite Pharma, Inc.; oNKo-innate Pty. Ltd.; and Roche Holding AG. The company has partnership with Arcus Biosciences, Inc. to co-develop and co-commercialize next-generation cancer immunotherapies. Gilead Sciences, Inc. was founded in 1987 and is headquartered in Foster City, California.

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