Will Gilead Continue to Deliver Steady Returns?

With shares of Gilead Sciences Inc. (NASDAQ:GILD) trading at around $39.59, is GILD an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Q4 EPS came in at $0.47, which beat expectations by $0.02. Excluding restructuring and other one-time costs, EPS was $0.50. Q4 profit rose 15 percent year-over-year, and Q4 revenue rose 18 percent year-over-year. Revenue came in at $2.59 billion, which beat expectations. Viread sales increased 19 percent to $227 million. Stribild sales were $40 million. There is no significant increase or decrease in sales for Stribild, as it’s a relatively new HIV drug. FY2012 EPS came in at $1.64, which was lower than in 2011. However, FY2012 revenue was $9.7 billion, which was a 16 percent increase compared to 2011.

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Gilead already dominates the HIV drug space. Now, Gilead is looking to expand into the hepatitis C space. If this expansion is successful, then Gilead will improve an already strong operation. In November, the company announced positive results for a three-drug treatment for hepatitis C.

Let’s look at some important numbers prior to forming an opinion on this stock…