Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 6.7 |
| EV/EBITDA | 5.1 |
| Fwd P/E | 8.7 |
| PEG | 4.4 |
| Analyst target | 6.0 |
- ▸Forward P/E: 12.9x
- ▸PEG: 2.14
GILD · Why this verdict
Why Gilead Sciences (GILD) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Gilead operates a high-quality franchise with 43% return on equity, best-in-class margins of 31%, and a perfect four-quarter earnings beat streak, while 14.1% upside to the analyst consensus target and a 2.4-to-1 risk/reward offer a structurally sound setup. The near-term constraint is price momentum: the stock is below its 200-day moving average in what the data characterizes as a pullback within a still-rising trend—not a confirmed breakdown—but momentum has not yet turned to support a new commitment, and 90% of revenue concentrated in three wholesale distributors is a latent vulnerability.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business earns a 43% return on equity, sustains net margins of 31%, and scores at the top tier of its peer group on quality metrics—with a near-perfect Piotroski financial health score of 8 out of 9—making it one of the more financially sound franchises in large-cap healthcare. Quality breakdown | Net margin remains above 25% and return on equity stays above 30% over the next four quarters, confirming that the margin and return profile is structural rather than cyclical. | →Stable |
| CounterRevenue concentration in three large wholesale distributors—who together account for 90% of sales—means a renegotiation or contract loss could rapidly compress volumes and erode the margins that currently support the quality standing. | ||
The company has beaten analyst earnings estimates in each of the last four consecutive quarters, with an average surprise of nearly 7%—a track record of consistently under-promising and over-delivering that gives credibility to the forward earnings multiple of 12.9x. Catalyst breakdown | The beat streak extends to six or more consecutive quarters, keeping the average earnings surprise above 5% and sustaining confidence in forward guidance. | →Stable |
| CounterThe dividend payout is flagged as potentially uncovered by cash flow, which could constrain future earnings reinvestment and may eventually force a payout reset that would unsettle income-oriented holders who currently price in yield. | ||
Price sits below the 200-day moving average, but that average is still rising at 2.2% per month—the data characterizes this as a pullback within an uptrend rather than a confirmed breakdown—suggesting the technical weakness may be a temporary headwind rather than a structural trend reversal. Momentum breakdown | Price recovers above the 200-day moving average within two to three months, with on-balance volume stabilizing and confirming that institutional demand has returned. | →Stable |
| CounterOn-balance volume is falling—indicating more shares are being sold than accumulated at current levels—and if selling continues to outpace buying, what the data treats as a temporary dip can deepen into a more sustained decline. | ||
Three large wholesale distributors together account for 90% of revenue—a level of customer concentration flagged as a high-severity concern—as any renegotiation, disintermediation, or distributor-side financial stress would directly impair a dominant share of the revenue base. Bear case | Revenue from the three major wholesale distributors remains stable or grows, and no single distributor relationship shows signs of renegotiation or volume loss over the next four quarters. | →Stable |
| CounterThe business has sustained a 43% return on equity and best-in-class margins despite this concentration structure, suggesting the wholesale partnerships are entrenched and the risk is more theoretical than near-term operational. | ||
The business earns a 43% return on equity, sustains net margins of 31%, and scores at the top tier of its peer group on quality metrics—with a near-perfect Piotroski financial health score of 8 out of 9—making it one of the more financially sound franchises in large-cap healthcare.
→StableQuality breakdown
- Expectation
- Net margin remains above 25% and return on equity stays above 30% over the next four quarters, confirming that the margin and return profile is structural rather than cyclical.
CounterRevenue concentration in three large wholesale distributors—who together account for 90% of sales—means a renegotiation or contract loss could rapidly compress volumes and erode the margins that currently support the quality standing.
The company has beaten analyst earnings estimates in each of the last four consecutive quarters, with an average surprise of nearly 7%—a track record of consistently under-promising and over-delivering that gives credibility to the forward earnings multiple of 12.9x.
→StableCatalyst breakdown
- Expectation
- The beat streak extends to six or more consecutive quarters, keeping the average earnings surprise above 5% and sustaining confidence in forward guidance.
CounterThe dividend payout is flagged as potentially uncovered by cash flow, which could constrain future earnings reinvestment and may eventually force a payout reset that would unsettle income-oriented holders who currently price in yield.
Price sits below the 200-day moving average, but that average is still rising at 2.2% per month—the data characterizes this as a pullback within an uptrend rather than a confirmed breakdown—suggesting the technical weakness may be a temporary headwind rather than a structural trend reversal.
→StableMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average within two to three months, with on-balance volume stabilizing and confirming that institutional demand has returned.
CounterOn-balance volume is falling—indicating more shares are being sold than accumulated at current levels—and if selling continues to outpace buying, what the data treats as a temporary dip can deepen into a more sustained decline.
Three large wholesale distributors together account for 90% of revenue—a level of customer concentration flagged as a high-severity concern—as any renegotiation, disintermediation, or distributor-side financial stress would directly impair a dominant share of the revenue base.
→StableBear case
- Expectation
- Revenue from the three major wholesale distributors remains stable or grows, and no single distributor relationship shows signs of renegotiation or volume loss over the next four quarters.
CounterThe business has sustained a 43% return on equity and best-in-class margins despite this concentration structure, suggesting the wholesale partnerships are entrenched and the risk is more theoretical than near-term operational.
Per-dimension breakdown
Quality
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.9 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.9 |
| FCF quality | 6.3 |
| Moat | 6.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 43%
- ▸Strong margins: 31%
- ▸Strong Piotroski F-Score: 8/9
- ▸High-quality business
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
| EPS growth | 10.0 |
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.9 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 2.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+1.9%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.7 |
| Analyst rating | 7.5 |
| Price target | 8.3 |
- ▸LLM news sentiment: +0.74 (n=2)
- ▸Analyst upside: 26%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $10,298,348 (0.007% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.1 |
| quality rank | 7.7 |
| growth rank | 3.8 |
- ▸Best-in-class margins
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.3 |
| support resistance | 7.1 |
| 52w position | 6.1 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.0 |
| days to cover | 6.8 |
| volatility | 5.5 |
| put call | 8.1 |
| implied vol | 7.1 |
| beta | 10.0 |
| debt equity | 5.3 |
| news risk | 5.0 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.9 |
| dividend safety | 4.8 |
| news activity | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:5.3>=4.5
- ASYMMETRY:2.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:43d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
2.38
Upside
+13.3%
Downside
5.6%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 43 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityCONSERVATIVE — Beta 0.33<0.8, Div 262.0%, Q=8.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.3>=4.5. Top dim: Quality at 8.3; weakest: Insider at 5.0. No conviction either direction.
The strongest dimensions are Quality at 8.3, Sentiment at 8.1, and Risk (lower is worse) at 7.1; the weakest are Insider at 5.0, Peer rank at 5.1, and Momentum at 5.3. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 2.38 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business earns a 43% return on equity, sustains net margins of 31%, and scores at the top tier of its peer group on quality metrics—with a near-perfect Piotroski financial health score of 8 out of 9—making it one of the more financially sound franchises in large-cap healthcare.
Trip ifNet margin compresses below 20% for 2 consecutive quarters, undermining the best-in-class profitability claim.
- P2The company has beaten analyst earnings estimates in each of the last four consecutive quarters, with an average surprise of nearly 7%—a track record of consistently under-promising and over-delivering that gives credibility to the forward earnings multiple of 12.9x.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the consistent beat streak.
- P3Price sits below the 200-day moving average, but that average is still rising at 2.2% per month—the data characterizes this as a pullback within an uptrend rather than a confirmed breakdown—suggesting the technical weakness may be a temporary headwind rather than a structural trend reversal.
Trip ifPrice falls more than 10% below the 200-day moving average while on-balance volume declines for 3 consecutive months, confirming a structural downtrend rather than a temporary pullback.
- P4Three large wholesale distributors together account for 90% of revenue—a level of customer concentration flagged as a high-severity concern—as any renegotiation, disintermediation, or distributor-side financial stress would directly impair a dominant share of the revenue base.
Trip ifRevenue from the three major wholesale distributors falls below 70% of total revenue for 2 consecutive fiscal years, indicating meaningful customer diversification has reduced concentration risk.