Gilead SciencesGILD

We expect revenue to grow from $30.4B in FY2026 to $41.1B in FY2031 (~6% CAGR), with EPS growing from $0.26 to $13.50 (~120% CAGR). Growth is driven by the continued dominance of Biktarvy in the HIV market and the rapid expansion of the oncology portfolio, specifically Trodelvy. Profitability remains high as the company shifts its mix toward higher-margin cell therapies and leverages its existing sales infrastructure for new drug launches. EPS grows significantly faster than revenue as the company moves past one-time acquisition costs and continues its aggressive share repurchase program. Operating margin expected to reach ~41% by FY2031.

Sunlenca becomes the standard for global HIV prevention. If approved for PrEP, Sunlenca's twice-yearly injection would revolutionize the market and protect Gilead's HIV dominance for a decade.

Trodelvy expands into earlier lines of cancer treatment. Moving Trodelvy from late-stage to early-stage treatment could triple its addressable patient population and drive multi-billion dollar growth.

Arcellx cell therapy captures the multiple myeloma market. Successful commercialization of anito-cel would give Gilead a best-in-class product in one of the most profitable cancer segments.

Patent challenges or generic competition for Biktarvy accelerate. If legal challenges succeed or a competitor launches a superior oral drug, Gilead's core cash flow would decline sharply.

Clinical trial failures for key oncology pipeline assets. High acquisition costs for Arcellx and Tubulis only pay off if their experimental drugs actually reach the market and sell.

Government drug pricing legislation limits oncology profit margins. New laws in the US could force Gilead to lower prices on its most expensive and newest cancer treatments.

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We use a Forward P/E approach based on FY2027 earnings to value the business. This framework is the industry standard for mature pharmaceutical companies because it focuses on the sustainable earnings power of the drug portfolio rather than short-term accounting noise or heavy depreciation from past acquisitions.

The calculation uses the FY2027 EPS estimate of $9.63 multiplied by a 15x forward multiple, resulting in a $144 fair value. This 15x multiple sits at the midpoint of the mature biopharma peer range (AbbVie 16x, Amgen 15x, Bristol Myers 8x), reflecting Gilead's superior HIV moat but lower overall diversification compared to AbbVie. We use the FY2027 EPS of $9.63 instead of the FY2026 projection of $0.26 because the 2026 figure is heavily distorted by one-time acquisition-related charges and does not reflect the company's normalized earning power.

Cross-checked with a Forward EV/EBITDA approach, we arrive at a fair value of $146—within 2% of our primary $144 result, confirming the valuation. We estimated a FY2027 EBITDA of roughly $13.5B (based on historical 45% margins) and applied a 15x multiple, which is conservative relative to Gilead’s four-year average of 17x. After subtracting the $14.5B in net debt and dividing by the share count, the result strongly supports our P/E-based target and suggests the current market price is slightly undervalued.

We're assuming Gilead's HIV franchise maintains its market leadership through 2028 despite rising competition. HIV sales were $20.75B last year, and the company's shift toward long-acting injectable treatments is expected to defend this moat as older daily pills lose patent protection. This stability provides the "floor" for the company's valuation.

We're assuming the Oncology and Cell Therapy segments reach a combined 20% of total revenue by FY2028. Trodelvy and Cell Therapy products (like Yescarta) are currently smaller contributors but grew at significant rates last year; sustaining this momentum is necessary to transition Gilead from a "one-disease" company to a diversified biopharma giant.

We're assuming a 15x forward P/E multiple is appropriate for a mature biopharma with moderate growth. This multiple accounts for the steady cash flow of the HIV business while giving some credit for the higher-growth oncology pipeline, positioning Gilead fairly against peers with similar growth profiles.

The biggest risk is the heavy revenue concentration in the HIV portfolio, which currently accounts for roughly 80% of total sales. Any regulatory changes to drug pricing or a faster-than-expected patent erosion for key drugs like Biktarvy would compress the stock's multiple. This would likely force the forward P/E down from 15x to 10x, knocking approximately $48 off the per-share fair value. Watch for "HIV product sales" growth dipping below 2% YoY in future prints.