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Why Gilead Sciences (GILD) Stock Was Down Today

NEW YORK (TheStreet) -- Shares of Gilead Sciences Inc. (GILD - Get Report) closed down 4.0% to $68.55 in trading Friday. Gilead's stock has been steadily dropping this week since its Wednesday high of $74.83 and is down 19% since late February.

Sales of company's breakthrough hepatitis C drug treatment, Sovaldi, fell 5% this week according to RBC Capital Markets. The company's stock has been hampered by an investigation by U.S. lawmakers as to why the drug is prohibitively expensive. The drug treatment costs $1,000 per pill or $84,000 for a 12 week treatment program. 

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It wasn't all bad news for the biotech company Friday, however, after the European Medicines Agency accepted the company's application for an accelerated assessment of its once a day fixed-dose hepatitis C treatment.

Acceptance of the request reduced the wait time for approval by two months.

TheStreet Ratings team rates GILEAD SCIENCES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

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"We rate GILEAD SCIENCES INC (GILD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, reasonable valuation levels, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • GILD's revenue growth has slightly outpaced the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 20.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Compared to its closing price of one year ago, GILD's share price has jumped by 69.64%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GILD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for GILEAD SCIENCES INC is currently very high, coming in at 75.91%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.36% is above that of the industry average.
  • GILEAD SCIENCES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GILEAD SCIENCES INC increased its bottom line by earning $1.83 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($3.81 versus $1.83).
  • You can view the full analysis from the report here: GILD Ratings Report
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