Analyzing Gilead Sciences’ Stock Performance



Stock performance

Gilead Sciences (GILD) was trading at $81.7 as of September 21, 2016. It has a 50-day moving average of $79.4 and a 200-day moving average of $86. As of September 21, 2016, Gilead Sciences’ stock was trading ~6.5% above its 52-week low of $76.7 on September 2, 2016, and ~2.6% below its 52-week high of $171.6 on October 27, 2015. The company’s share price fell ~5.6% since the release of its 2Q16 earnings on July 25, 2016.

Gilead Sciences’ stock price fell ~6.4% after the release of its 2Q16 results on July 25, 2016. The company’s revenue fell, so it lowered its fiscal 2016 guidance. Since July 25, 2016, the company’s stock has traded between $76.9 and $88.5.

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Gilead Sciences has fallen ~24.7% over the last year. This compares to the US biotechnology industry’s performance—represented by the iShares Nasdaq Biotechnology ETF (IBB). IBB fell ~16.6% during the same period. The market, represented by the S&P 500 index, returned ~10.5% over the last year. Year-to-date, the company fell ~20%.

As of September 22, 2016, Gilead Sciences’ peers Amgen (AMGN), Celgene (CELG), and Biogen (BIIB) generated returns of 15.4%, -10.6%, and -0.85%, respectively, over the last 12 months.

Behind enormous historical stock price gains

Over the last five years, Gilead Sciences’ stocks rose ~300%—triggered by spectacular Hepatitis C sales. It’s estimated that the sales have reached their peak. They’re on a downward trajectory towards a more stable revenue stream. However, the business remains high margin with an attractive market. Gilead Sciences’ future growth is expected to be driven by new product launches and strategic acquisitions. To learn more about Gilead Sciences’ new opportunity areas and related research and development efforts, read Gilead Sciences Continues to Explore Opportunities.

Next, we’ll discuss the company’s high gross margins despite its weak sales performance in recent quarters.


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