Yahoo Finance Gilead Sciences, Inc. Just Missed Earnings - But Analysts Have Updated Their Models
Gilead Sciences, Inc. (NASDAQ:GILD) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with US$6.4b revenue coming in 5.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$1.37 missed the mark badly, arriving some 22% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Gilead Sciences after the latest results.
View our latest analysis for Gilead Sciences
Taking into account the latest results, the 25 analysts covering Gilead Sciences provided consensus estimates of US$24.7b revenue in 2021, which would reflect a perceptible 3.4% decline on its sales over the past 12 months. Per-share earnings are expected to surge 2,144% to US$5.38. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$24.8b and earnings per share (EPS) of US$5.63 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$75.15, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Gilead Sciences analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$60.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2021 compared to the historical decline of 7.6% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 16% annually. So while a broad number of companies are forecast to grow, unfortunately Gilead Sciences is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Gilead Sciences. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Gilead Sciences analysts - going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with Gilead Sciences .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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