In a market where value is scarce, NASDAQ:GILD offers a refreshing opportunity with its solid fundamentals.

Our stock screening tool has identified GILEAD SCIENCES INC (NASDAQ:GILD) as an undervalued gem with strong fundamentals. NASDAQ:GILD boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Understanding NASDAQ:GILD's Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:GILD has earned a 7 for valuation:

• GILD is valuated reasonably with a Price/Earnings ratio of 10.66.
• Based on the Price/Earnings ratio, GILD is valued cheaply inside the industry as 97.84% of the companies are valued more expensively.
• GILD's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.73.
• With a Price/Forward Earnings ratio of 10.09, the valuation of GILD can be described as very reasonable.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of GILD indicates a rather cheap valuation: GILD is cheaper than 98.84% of the companies listed in the same industry.
• GILD is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 19.36, which is the current average of the S&P500 Index.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GILD indicates a rather cheap valuation: GILD is cheaper than 97.01% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, GILD is valued cheaply inside the industry as 98.34% of the companies are valued more expensively.
• GILD has an outstanding profitability rating, which may justify a higher PE ratio.

Evaluating Profitability: NASDAQ:GILD

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:GILD scores a 8 out of 10:

• Looking at the Return On Assets, with a value of 9.42%, GILD belongs to the top of the industry, outperforming 96.68% of the companies in the same industry.
• GILD has a Return On Equity of 26.33%. This is amongst the best in the industry. GILD outperforms 98.01% of its industry peers.
• The Return On Invested Capital of GILD (12.57%) is better than 97.01% of its industry peers.
• The 3 year average ROIC (11.27%) for GILD is below the current ROIC(12.57%), indicating increased profibility in the last year.
• The Profit Margin of GILD (21.45%) is better than 97.18% of its industry peers.
• The Operating Margin of GILD (30.16%) is better than 97.51% of its industry peers.
• Looking at the Gross Margin, with a value of 78.81%, GILD belongs to the top of the industry, outperforming 85.90% of the companies in the same industry.

Health Analysis for NASDAQ:GILD

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:GILD has achieved a 5 out of 10:

• Looking at the Altman-Z score, with a value of 2.70, GILD is in the better half of the industry, outperforming 74.46% of the companies in the same industry.
• GILD has a debt to FCF ratio of 3.18. This is a good value and a sign of high solvency as GILD would need 3.18 years to pay back of all of its debts.
• With an excellent Debt to FCF ratio value of 3.18, GILD belongs to the best of the industry, outperforming 95.19% of the companies in the same industry.

Looking at the Growth

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:GILD was assigned a score of 4 for growth:

• GILD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.13%, which is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of GILD for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.