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Gilead Sciences Inc. Message Board

  • peter_norths_proctologist peter_norths_proctologist May 24, 2013 4:18 PM Flag

    What could they say at ASCO that isn't already priced into stock?

    Serious question.

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    • Ahh yea..GILD does 3B in profit a year now..how do you think they bought Pharmassettttttt ???? Add HepC numbers into it....and YEA!! $4.8B in net income is on the low side of estimates..GO GILD!!! Oh yea guys..have you factored in Oncology yet ???? :)))

      • 1 Reply to waiisland
      • peter_norths_proctologist peter_norths_proctologist May 29, 2013 7:45 PM Flag

        "...GILD does 3B in profit a year now.. Add HepC numbers into it and YEA!! $4.8B in net income is on the low side of estimates"

        This doesn't address my original question: Is it already priced into the stock?

        You predict $4.8 million annual net income. Okay, assume that happens sometime in the future. Apply a forward P/E ratio of 20, and you get a market cap of $96 billion. Compare that to the current market cap of $92 billion (i.e., $55.63/share x 1.66 billion shares outstanding), and I have to ask if the HepC potential isn't already priced into the stock.

    • Sort of related thoughts from Seeking Alpha on GILD future...
      Putting a price on sofosbuvir and Gilead

      If you assume that Gilead's single pill HIV patent cliff strategy works, and then simply add the $6.42 billion analyst estimate of sofosbuvir sales to Gilead's current TTM revenues of $9.95 billion, you arrive at a total revenue of $16.37 billion in 2017.

      Over the past five years Gilead has maintained a quarterly profit margin between 20-40%. If you apply a 30% profit margin to the total revenue figure of $16.37 billion mentioned above, you arrive at a net income figure of $4.91 billion.

      The average number of outstanding shares recorded in Q1 2013 was 760 million. Assuming Gilead doesn't dilute or repurchase shares, you arrive at earnings of $6.46 per share. At Gilead's recent price of about $55, that's a PE multiple of about 8.51 times 2017 earnings.

      If you apply a reasonable PE multiple of 20 to the projected earnings figure of $6.46 above, that's a share price of $170.23. That would be a total increase of 209.5% in five years, or a compound annual growth rate of 25.4%.

    • You never know!

 
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