Gilead Sciences: 4 Reasons This Stock Has Much More To Rise

Core Viewpoint - Gilead Sciences has experienced a significant stock surge, reaching a new 52-week high, driven by robust earnings and positive future guidance, indicating renewed investor interest after years of stagnation [1][4]. Financial Performance - Gilead reported non-GAAP diluted earnings of $1.90 per share for Q4 2024, exceeding consensus estimates by $0.16. Revenues increased by 7% year-over-year to $7.57 billion, surpassing the $7.15 billion consensus estimate, attributed to higher product sales and reduced research expenses [4]. - The product gross margin improved to 79% in Q4 2024, up from 70% the previous year. The company generated $3 billion in operating cash flow and ended the year with $10 billion in cash and cash equivalents [4]. Future Guidance - Gilead provided an optimistic outlook for 2025, projecting earnings per share (EPS) between $7.70 and $8.10, above the consensus estimate of $7.61. Product sales are anticipated to range from $28.2 billion to $28.6 billion, including $1.4 billion from Veklury, its COVID-19 treatment [5]. Product Growth - The company’s HIV product sales grew by 8% year-over-year to $19.6 billion, with Biktarvy sales rising 13% to $13.4 billion and Descovy sales increasing by 6% to $2.1 billion. The Liver Disease portfolio also saw a 9% increase in sales to $3 billion, while Trodelvy sales for breast cancer treatment surged by 24% to $1.3 billion [6]. Breakthrough Developments - Gilead's Lenacapavir drug, which has shown 100% effectiveness in HIV prevention studies, is set to launch in the summer of 2025. The drug has received FDA breakthrough treatment designation to expedite its approval process [7][8]. Stock Performance and Technical Analysis - Gilead's stock has formed a bull flag pattern, indicating potential for further price increases. The stock recently broke out above $96.28 following the Q4 earnings beat, reaching a 52-week high of $106.69 [9][10]. The consensus price target is $101.33, with a high forecast of $125.00 [10].