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Summary

  • Q2 2014 EPS reported of $2.36 per share is up 372% Y/Y.
  • Q2 earnings have confirmed my earlier opinion of the stock.
  • For the full year, Gilead updated guidance from sales of about $11.4 billion to about $22 billion.

Gilead Sciences (NASDAQ:GILD) reported earnings Wednesday that beat expectations by $0.57 per share. Revenue came in at $6.54 billion, which was $680 million above estimates. The revenue number was an increase of about 136% from Q2 2013.

In my previous article about Gilead titled, "Gilead Sciences: Cause For Concern?", I noted that "a forward P/E of 14 is ludicrous". Based on the company's new guidance that forward P/E is about to come down even further as analysts will be putting out higher revised EPS estimates. In my opinion, the stock is as undervalued as it has ever been.

Also in the article I cite above, I noted that some Gilead bears feel that the company is a "one trick pony". For this most recent quarter, the non-Sovaldi sales increased a healthy 10%, including a Y/Y sales increase of 171% for Stribild, a drug that I highlighted in my previous article.

I was bullish on Gilead before the earnings report and obviously am still strongly bullish on the stock now. There is one point to keep in mind and that is Q3 Sovaldi sales could show small sequential growth -- or even a slight decline. There are thousands of hep C patients waiting for the two drug combo pill that is expected to be approved later in the year.

Source: Update: Gilead Sciences Earnings