Gilead Sciences, Inc. (GILD) Intrinsic Value & DCF Valuation
Drug Manufacturers - General · NASDAQ
Current Price
$132.73
Intrinsic Value
$144.92
+8.4% margin of safety
What Is Gilead Sciences, Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Gilead Sciences, Inc. (GILD) at $144.92 per share, compared with a market price of $132.73, a margin of safety of +8.4%. The base case assumes 5.7% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $114.64 to $179.92. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Gilead Sciences, Inc. (GILD) Undervalued?
At $132.73, GILD trades about 8.4% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Strong HIV Franchise
Gilead's long-standing dominance in HIV treatment provides significant recurring revenue and customer loyalty. This established market position creates high switching costs for patients.
↑Oncology Pipeline & Approvals
Recent FDA approval for Trodelvy in expanded breast cancer indications strengthens its oncology portfolio. This demonstrates successful R&D and market penetration in a high-growth area.
↑Intellectual Property & Patents
Gilead benefits from patent protection on its key drugs, creating a temporary monopoly. This allows for premium pricing and reinvestment into research and development.
INVESTMENT RISKS
↓Pipeline Failures
The success of pharmaceutical companies heavily relies on their R&D pipeline. Failure of key drug candidates in clinical trials can significantly impact future revenue streams.
↓Regulatory Scrutiny
Drug pricing and approval processes are subject to intense government and public scrutiny. Changes in regulations or pricing pressures can negatively affect profitability.
↓Market Access Challenges
Gaining and maintaining market access for new drugs can be difficult due to payer negotiations and formulary restrictions. Reimbursement challenges can limit sales potential.
Base case
GILD base case valuation
Intrinsic Value
$144.92
Margin of safety
+8.4%
Expected annual return
+1.8%
Base case assumptions: 5.7% annual growth, 10.0% discount rate, 16x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the GILD valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Gilead Sciences, Inc. respond.
Open DCF Calculator for GILDCompany Overview
Gilead Sciences, Inc. is a global biopharmaceutical enterprise, with operations spanning the United States, Europe, and numerous international markets. Its core mission involves discovering, developing, and commercializing innovative medications to address critical health needs. The company's extensive product portfolio encompasses treatments for a variety of severe conditions. For HIV/AIDS, it supplies key therapies such as Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/Eviplera, Stribild, and Atripla. In response to the 2019 coronavirus pandemic, Gilead provides Veklury, an injectable drug for intravenous administration. Its offerings for liver diseases include Epclusa, Harvoni, Vosevi, Vemlidy, and Viread. Furthermore, Gilead assists patients battling hematological disorders, various cancers, and those undergoing cell therapy, through products like Yescarta, Tecartus, Trodelvy, and Zydelig. Other specialized medicines include Letairis, an oral drug for pulmonary arterial hypertension; Ranexa, also an oral medication, for chronic angina; and AmBisome, a liposomal formulation designed to combat serious invasive fungal infections. Gilead Sciences, Inc. actively engages in collaboration agreements with a diverse range of partners to advance its therapeutic pipeline. These include Arcus Biosciences, Inc., Pionyr Immunotherapeutics Inc., Tizona Therapeutics, Inc., Tango Therapeutics, Inc., Jounce Therapeutics, Inc., Galapagos NV, Janssen Sciences Ireland Unlimited Company, Japan Tobacco, Inc., Gadeta B.V., Bristol-Myers Squibb Company, Dragonfly Therapeutics, Inc., and Merck & Co, Inc. The company was founded in 1987 and its corporate headquarters are situated in Foster City, California.
Financial Metrics — GILD Stock Valuation Data
Revenue/Share (TTM)
$23.94
FCF/Share (TTM)
$8.24
ROIC (TTM)
20.3%
ROE (TTM)
42.2%
P/FCF
16.1x
EV/EBITDA
12.8x
FCF Yield
6.21%
Debt/Equity
0.94x
Based on trailing twelve-month data, GILD shows a free cash flow per share of $8.24 and a ROIC of 20.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 16.1x and FCF yield of 6.21% are important context metrics when evaluating GILD's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of GILD?
Gilead Sciences, Inc. currently generates $8.24 in free cash flow per share. At the current price of $132.73, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is GILD undervalued?
GILD trades at a P/FCF ratio of 16.1x with a free cash flow yield of 6.21%. This P/FCF is in a moderate range. However, whether GILD is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value GILD stock using DCF?
To perform a DCF valuation on Gilead Sciences, Inc.: (1) Start with the trailing free cash flow per share ($8.24) as the base, (2) project future FCF growth over 5-10 years based on Drug Manufacturers - General industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting GILD's risk profile — with a debt-to-equity of 0.94x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to GILD?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Gilead Sciences, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Drug Manufacturers - General trends, then discounting those amounts to today's dollars. GILD's ROIC of 20.3% reflects how efficiently the company converts invested capital into profit.
How does WACC affect GILD stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For GILD, with a debt-to-equity ratio of 0.94x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 12.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See GILD PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value GILD with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.