Gilead Sciences Stock Gains 21% YTD: Buy, Sell or Hold?

Biotech giant Gilead Sciences, Inc. GILD has put up a strong performance amid a volatile market. Shares of this biotech giant have gained 21.1% year to date against the industry’s decline of 4.7%. The stock has outperformed the sector and the S&P 500 Index in this timeframe.Gilead Outperforms Industry, Sector & S&P 500 IndexImage Source: Zacks Investment ResearchGilead Sciences is a dominant player in the HIV market with market-leading treatments. Its diverse portfolio also includes drugs for liver, hematology/oncology and inflammation/respiratory diseases.Approval of new drugs, encouraging pipeline progress and positive data readouts have boosted investors’ sentiment in the past six months.  However, the oncology business is under pressure.Let's delve into GILD’s strengths and weaknesses to analyze how to play the stock at present.GILD’s Leading HIV Franchise Will Continue Its MomentumGilead’s flagship drug, Biktarvy (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg, BIC/FTC/TAF), for HIV-1 infection has become the number-one prescribed regimen for both treatment-naïve and switch patients. Biktarvy accounts for over 51% share of the treatment market in the United States and should maintain momentum for GILD in the upcoming quarters.  Descovy (FTC 200 mg/TAF 25 mg) for pre-exposure prophylaxis (PrEP) is also witnessing good uptake. It maintains over 40% market share in the PrEP market in the United States.Gilead’s efforts to innovate its HIV portfolio are impressive. Late-stage studies, PURPOSE 1 and PURPOSE 2, validated lenacapavir’s potential to prevent HIV. The FDA accepted new drug application submissions for twice-yearly lenacapavir for HIV prevention under priority review, with a target action date of June 19, 2025.  The European Medicines Agency validated the Marketing Authorization Application and EU-Medicines for All application for twice-yearly lenacapavir for HIV prevention.The successful development and potential approval of lenacapavir for the prevention of the disease should solidify Gilead’s HIV franchise.  Per GILD, lenacapavir, with its twice-yearly dosing, could set a new bar for HIV prevention and allow PrEP to reach a larger number of people who could benefit from a prevention regimen.Livdelzi Approval Strengthens GILD’s Liver Disease PortfolioThe FDA approval of seladelpar for the treatment of primary biliary cholangitis (PBC) has strengthened GILD’s liver disease portfolio and validated its CymaBay acquisition. The drug's initial uptake is encouraging.The candidate was approved under the brand name Livdelzi. Gilead also recently received conditional marketing authorization from the European Commission for seladelpar for the treatment of PBC.Challenges for GILD’s Oncology BusinessGilead’s oncology portfolio, comprising the Cell Therapy franchise and breast cancer drug Trodelvy, has diversified its overall business. However, the Cell Therapy franchise, comprising Yescarta and Tecartus, is currently under pressure due to competitive headwinds in the United States and Europe that are expected to continue in 2025.Breast cancer drug Trodelvy’s sales were lower than expected in the first quarter due to inventory dynamics.Gilead announced positive top-line results from the phase III ASCENT-03 study on Trodelvy, which showed highly statistically significant and clinically meaningful improvement in progression-free survival in patients with first-line metastatic triple-negative breast cancer (mTNBC) who are not candidates for checkpoint inhibitors.The potential launch of anito-cel in multiple myeloma and Trodelvy in first-line mTNBC in 2026 will strengthen the company’s oncology business.GILD’s Valuation and Estimate RevisionFrom a valuation standpoint, GILD is expensive. According to the price/earnings ratio, GILD’s shares currently trade at 13.70x forward earnings, lower than the large-cap pharma industry’s average of 14.62X but higher than its mean of 10.53X. Image Source: Zacks Investment ResearchEarnings estimates for GILD have moved north in the past 60 days. The bottom-line estimate for 2025 has increased to $7.91 from $7.87, while that for 2026 has improved to $8.39 from $8.31. Image Source: Zacks Investment ResearchStay Invested in GILDLarge biotech companies are generally considered safe havens for investors interested in this sector as they are well equipped to weather the uncertain macroenvironment.GILD is one of the dominant players in the HIV market.  Gilead’s efforts to constantly innovate its HIV portfolio should enable it to maintain growth amid competition from GSK plc GSK. GILD has also collaborated with Merck MRK to evaluate the investigational combination of islatravir and lenacapavir for the treatment of HIV. The potential launch of lenacapavir for PrEP in 2025 will be a significant boost for the company.Gilead’s strategic deals and acquisitions to diversify its business are encouraging.  However, Biktarvy sales are expected to be under pressure due to Medicare Part D redesign, which, in turn, should impact overall HIV growth.Hence, we advise prospective investors to wait and watch how well Biktarvy and the oncology business combat the existing headwinds before making a positive investment decision. In addition, we believe investors should also wait for better entry levels.For investors already owning the stock, it’s important to note that Gilead has been consistently increasing and paying out dividends. The company declared a quarterly dividend of $0.79 per share of common stock for the second quarter of 2025.  Its strong cash position (as of March 31, 2025, GILD had $7.9 billion of cash, cash equivalents and marketable debt securities) indicates that the current yield of 2.91% is sustainable.Gilead presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GSK PLC Sponsored ADR (GSK): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report Gilead Sciences, Inc. (GILD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks