DCF Studio

    GILD · NMS · Healthcare

    Gilead Sciences, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 208.42

    Market price

    USD 170.33

    Implied upside

    +22.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 208.42+22.4%
    Exit multiple
    USD 211.57+24.2%
    Market price
    USD 170.33

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn8bn16bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 31.3bnUSD 33.5bnUSD 35.8bnUSD 37.9bnUSD 40.0bnUSD 42.0bnUSD 43.7bnUSD 45.4bnUSD 46.8bnUSD 47.9bn+4.9%
    EBITUSD 11.7bnUSD 12.5bnUSD 13.4bnUSD 14.2bnUSD 14.9bnUSD 15.7bnUSD 16.3bnUSD 16.9bnUSD 17.5bnUSD 17.9bn+4.9%
    NOPATUSD 9.4bnUSD 10.0bnUSD 10.7bnUSD 11.4bnUSD 12.0bnUSD 12.6bnUSD 13.1bnUSD 13.6bnUSD 14.0bnUSD 14.4bn+4.9%
    Add depreciation & amortisationUSD 2.9bnUSD 3.1bnUSD 3.3bnUSD 3.5bnUSD 3.7bnUSD 3.8bnUSD 4.0bnUSD 4.2bnUSD 4.3bnUSD 4.4bn+4.9%
    Less capital expenditureUSD -669.4mUSD -866.1mUSD -1.1bnUSD -1.3bnUSD -1.6bnUSD -1.8bnUSD -2.1bnUSD -2.4bnUSD -2.7bnUSD -2.9bn+17.8%
    Capex, % of revenue2.1%2.6%3.0%3.5%3.9%4.4%4.8%5.2%5.7%6.1%-
    Less increase in working capitalUSD -369.4mUSD -452.1mUSD -445.2mUSD -432.4mUSD -413.7mUSD -389.1mUSD -358.4mUSD -322.1mUSD -280.3mUSD -233.8m-5.0%
    Free cashflow to firmUSD 11.2bnUSD 11.8bnUSD 12.5bnUSD 13.1bnUSD 13.7bnUSD 14.2bnUSD 14.7bnUSD 15.0bnUSD 15.4bnUSD 15.6bn+3.7%
    Discount factor0.96670.90330.84410.78870.73700.68870.64350.60130.56190.5250-
    Present valueUSD 10.8bnUSD 10.7bnUSD 10.5bnUSD 10.3bnUSD 10.1bnUSD 9.8bnUSD 9.4bnUSD 9.0bnUSD 8.6bnUSD 8.2bn-
    Present Value Of The ForecastUSD 97.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.579Reported 0.372, pulled toward 1.0 (Blume)
    Cost of equity7.34%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 11.4x interest cover. Book interest / average debt was lower, at 4.0%.
    Market capitalisationUSD 211.3bn89.4% of capital
    Total debtUSD 24.9bn10.6% of capital, book value as a proxy
    Tax rate19.8%Effective, capped at statutory
    WACC7.02%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 208.42

    65% of EV

    Forecast FCFF, final year
    USD 15.6bn
    Capex at depreciation, working capital in reinvestment
    USD 17.4bn
    Less reinvestment at g/ROIC (13.4% of NOPAT)
    USD -2.3bn
    Capitalised
    USD 15.1bn
    ROIC (reported)
    18.7%
    Terminal value, undiscounted
    USD 341.7bn
    Terminal value, discounted
    USD 179.4bn
    Enterprise value
    USD 276.9bn
    Less net debt
    USD 15.3bn
    Equity value
    USD 261.6bn

    Exit at 15.7x EBITDA

    Value per shareUSD 211.57

    65% of EV

    Terminal value, undiscounted
    USD 349.3bn
    Terminal value, discounted
    USD 183.4bn
    Enterprise value
    USD 280.8bn
    Less net debt
    USD 15.3bn
    Equity value
    USD 265.5bn

    Spread between methods: 2%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.02%306.22336.74379.78444.65552.91
    6.02%235.62250.46269.77295.78332.50
    7.02%190.64198.56208.41220.94237.28
    8.02%159.49163.90169.27175.87184.11
    9.02%136.64139.13142.11145.72150.13

    Outlined: this model. Green text: above today's price of 170.33. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.6%5.0%2.7%
    EBIT margin40.2%37.4%29.5%
    Discount rate-7.0%8.0%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.