Stock Analysis on Net

Gilead Sciences Inc. (NASDAQ:GILD)

$24.99

Enterprise Value to FCFF (EV/FCFF)

Microsoft Excel

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Free Cash Flow to The Firm (FCFF)

Gilead Sciences Inc., FCFF calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income attributable to Gilead
Net loss attributable to noncontrolling interest
Net noncash charges
Changes in operating assets and liabilities
Net cash provided by operating activities
Interest paid, net of amounts capitalized, net of tax1
Capital expenditures
Free cash flow to the firm (FCFF)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


Net cash provided by operating activities
The net cash provided by operating activities exhibited notable fluctuations over the five-year period. Starting at 8,168 million US dollars in 2020, it increased significantly to a peak of 11,384 million US dollars in 2021. Subsequently, there was a decline to 9,072 million US dollars in 2022, followed by a further decrease to 8,006 million US dollars in 2023. However, this downward trend reversed in 2024, with the figure rising again to 10,828 million US dollars. Overall, this suggests a degree of variability in operating cash flows with a pronounced peak in 2021 and a recovery towards the end of the period.
Free cash flow to the firm (FCFF)
The free cash flow to the firm showed a pattern closely mirroring the operating cash flow behavior. An initial increase from 7,568 million US dollars in 2020 to a high of 11,538 million US dollars in 2021 was observed, followed by a drop to 9,056 million US dollars in 2022 and a slight rebound to 8,150 million US dollars in 2023. The FCFF then increased notably to 10,966 million US dollars in 2024. This parallel movement indicates that after initial growth, there were pressures reducing free cash flow in the middle years before a recovery took place, reflecting potentially shifting operational efficiencies or investment activities impacting cash generation.

Interest Paid, Net of Tax

Gilead Sciences Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Effective Income Tax Rate (EITR)
EITR1
Interest Paid, Net of Tax
Interest paid, net of amounts capitalized, before tax
Less: Interest paid, net of amounts capitalized, tax2
Interest paid, net of amounts capitalized, net of tax

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 See details »

2 2024 Calculation
Interest paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= × =


Effective Income Tax Rate (EITR)
The effective income tax rate exhibited significant variability over the observed period. Starting at a notably high level of 94.7% in 2020, it underwent a substantial decline in subsequent years, dropping to 25.1% in 2021 and continuing a gradual decrease to 18.2% in 2023. However, in 2024, the rate increased again to 30.5%. This pattern suggests considerable fluctuations in the company's tax environment or tax-related events impacting reported earnings during this timeframe.
Interest Paid, Net of Amounts Capitalized, Net of Tax
The interest paid, net of capitalized amounts and tax, demonstrated an overall increasing trend from 2020 through 2023. The amount rose sharply from US$50 million in 2020 to a peak of US$733 million in 2021, followed by a slight decline but remaining elevated at US$712 million in 2022 and US$729 million in 2023. In 2024, a moderate reduction was observed, with interest paid decreasing to US$661 million. This pattern indicates a significant increase in interest expenses starting in 2021, which then stabilized at a higher level compared to 2020 but showed signs of a mild downward adjustment in the most recent year.

Enterprise Value to FCFF Ratio, Current

Gilead Sciences Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Valuation Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors1
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Danaher Corp.
Eli Lilly & Co.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences
EV/FCFF, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Gilead Sciences Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Enterprise value (EV)1
Free cash flow to the firm (FCFF)2
Valuation Ratio
EV/FCFF3
Benchmarks
EV/FCFF, Competitors4
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Danaher Corp.
Eli Lilly & Co.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences
EV/FCFF, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 See details »

2 See details »

3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =

4 Click competitor name to see calculations.


Enterprise Value (EV)
The enterprise value exhibited fluctuations over the period from 2020 to 2024. Initially, EV decreased from approximately 102.9 billion USD in 2020 to around 97.1 billion USD in 2021, indicating a contraction. This was followed by a substantial increase in 2022 to nearly 123.0 billion USD. A decline occurred again in 2023 to about 109.3 billion USD, before a pronounced rise to approximately 159.0 billion USD in 2024, marking the highest value in the observed timeframe.
Free Cash Flow to the Firm (FCFF)
Free cash flow showed variability but remained generally strong throughout the analyzed years. It increased notably from 7.6 billion USD in 2020 to a peak of 11.5 billion USD in 2021. Subsequently, FCFF decreased to 9.1 billion USD in 2022 and further to 8.2 billion USD in 2023. In 2024, FCFF recovered to reach 11.0 billion USD, close to the earlier peak levels.
EV/FCFF Ratio
The EV to FCFF ratio reflects valuation relative to free cash flow generation capacity. This ratio decreased sharply from 13.6 in 2020 to a low of 8.42 in 2021, driven by an increase in FCFF combined with a decline in EV. However, it rose again to 13.58 in 2022 and remained relatively stable in 2023 at 13.41. In 2024, the ratio increased further to 14.5, indicating a significant rise in enterprise value relative to free cash flow.
Overall Trends and Insights
There is evidence of volatility in both enterprise value and free cash flow to the firm over the five-year period. Enterprise value showed a general upward trend after dips in 2021 and 2023, culminating in a substantial increase in 2024, possibly reflecting market optimism or changes in business valuation. Free cash flow, after peaking in 2021, experienced a decline but rebounded in 2024. The EV/FCFF ratio's decrease in 2021 suggests improved valuation based on cash flow, while its increase afterward implies reduced valuation efficiency or market premium in later years. The elevated ratio in 2024 may indicate higher market expectations or perceived growth potential despite FCFF not exceeding the prior peak.