Gilead Sciences, Inc. (GILD) Stock Valuation — DCF Analysis
Drug Manufacturers - General · NASDAQ
Current Price
$125.59
Intrinsic Value
$184.75
+32.0% margin of safety
COMPETITIVE MOAT
↑HIV Market Dominance
Gilead holds a commanding position in the HIV market with a strong portfolio of treatments. This established market share creates significant barriers to entry for competitors.
↑Oncology Pipeline Expansion
Strategic acquisitions like Ouro Medicines bolster Gilead's oncology and inflammation pipelines. This diversification aims to reduce reliance on existing revenue streams and capture future growth.
↑Lenacapavir Access Initiatives
Gilead's efforts to expand access to lenacapavir for HIV prevention, as seen in South Africa, demonstrate a commitment to global health. This can foster goodwill and long-term market penetration.
INVESTMENT RISKS
↓Patent Expirations
Key drug patents will eventually expire, opening the door for generic competition. This poses a significant threat to revenue from established blockbuster drugs.
↓Clinical Trial Failures
The drug development process is inherently risky, with a high rate of failure. Setbacks in clinical trials for promising new therapies could impact future growth.
↓Regulatory Hurdles
Gaining regulatory approval for new drugs is a complex and lengthy process. Delays or rejections from regulatory bodies can significantly hinder market entry and revenue generation.
Base case
GILD base case valuation
A base case discounted cash flow model for GILD estimates an intrinsic value of about $184.75 per share, against a current price of $125.59. The model assumes 12.8% annual free cash flow growth, a 10.0% discount rate, and a 15x exit multiple.
Intrinsic Value
$184.75
Margin of safety
+32.0%
Expected annual return
+8.0%
Base case assumptions: 12.8% annual growth, 10.0% discount rate, 15x exit multiple, 5 year projection. Data as of 2026-06-12.
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
15.2x
EV/EBITDA
12.8x
FCF Yield
6.56%
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 15.2x and FCF yield of 6.56% 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 $125.59, 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 15.2x with a free cash flow yield of 6.56%. 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% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.