Despite its impressive fundamentals, NASDAQ:GILD remains undervalued.

Our stock screener has singled out GILEAD SCIENCES INC (NASDAQ:GILD) as a stellar value proposition. NASDAQ:GILD not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Valuation Insights: NASDAQ:GILD

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:GILD, the assigned 7 reflects its valuation:

• With a Price/Earnings ratio of 11.38, the valuation of GILD can be described as very reasonable.
• Compared to the rest of the industry, the Price/Earnings ratio of GILD indicates a rather cheap valuation: GILD is cheaper than 98.48% of the companies listed in the same industry.
• The average S&P500 Price/Earnings ratio is at 25.83. GILD is valued rather cheaply when compared to this.
• A Price/Forward Earnings ratio of 10.70 indicates a reasonable valuation of GILD.
• Based on the Price/Forward Earnings ratio, GILD is valued cheaply inside the industry as 98.65% of the companies are valued more expensively.
• When comparing the Price/Forward Earnings ratio of GILD to the average of the S&P500 Index (20.78), we can say GILD is valued slightly cheaper.
• 97.30% of the companies in the same industry are more expensive than GILD, based on the Enterprise Value to EBITDA ratio.
• GILD's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GILD is cheaper than 98.31% of the companies in the same industry.
• GILD has an outstanding profitability rating, which may justify a higher PE ratio.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:GILD was assigned a score of 8 for profitability:

• GILD's Return On Assets of 9.42% is amongst the best of the industry. GILD outperforms 97.30% of its industry peers.
• Looking at the Return On Equity, with a value of 26.33%, GILD belongs to the top of the industry, outperforming 98.31% of the companies in the same industry.
• GILD's Return On Invested Capital of 12.57% is amongst the best of the industry. GILD outperforms 96.80% of its industry peers.
• The last Return On Invested Capital (12.57%) for GILD is above the 3 year average (11.27%), which is a sign of increasing profitability.
• GILD has a better Profit Margin (21.45%) than 97.81% of its industry peers.
• Looking at the Operating Margin, with a value of 30.16%, GILD belongs to the top of the industry, outperforming 97.81% of the companies in the same industry.
• GILD's Gross Margin of 78.81% is amongst the best of the industry. GILD outperforms 86.00% of its industry peers.

Looking at the Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:GILD, the assigned 5 reflects its health status:

• GILD's Altman-Z score of 2.80 is fine compared to the rest of the industry. GILD outperforms 70.99% of its industry peers.
• 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.
• GILD has a better Debt to FCF ratio (3.18) than 95.28% of its industry peers.

How do we evaluate the Growth for NASDAQ:GILD?

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:GILD has achieved a 4 out of 10:

• The Earnings Per Share has grown by an nice 11.13% over the past year.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• 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.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of GILD contains the most current fundamental analsysis.

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.