Gilead to Report Q2 Earnings: How Should You Play the Stock Now?

The EPS estimate for 2027 has increased to $9.73 from $9.58 in the said time frame.

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GILD’s Earnings Surprise History

GILD has a good track record. Its earnings beat estimates in three of the trailing four quarters and missed in the remaining one, delivering an average surprise of 6.75%. In the last reported quarter, the company’s earnings beat estimates by 7.41%.

What Our Model Predicts for GILD

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here, as you can see below.

Earnings ESP for GILD is -0.75%. The company currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Factors Influencing GILD’s Q2 Results

Gilead has a market-leading HIV franchise, led by flagship HIV therapies — Biktarvy and Descovy.

Biktarvy is the top revenue generator for GILD. Per the company, Biktarvy accounts for more than 52% of the treatment market in the United States, and continues to be the market leader in major markets around the world.

Gilead’s HIV pre-exposure prophylaxis (PrEP) portfolio comprises daily oral Descovy and the first and only twice-yearly injectable Yeztugo.

Descovy’s performance continues to be strong, primarily driven by higher demand and average realized price.

The top-line estimate for Biktarvy and Descovy is pegged at $3.6 billion and $750 million, respectively, and our model estimate for the same is pinned at $3.7 billion and $701 million.

Yeztugo raked in sales of $166 million in the first quarter. Following better-than-expected first-quarter results and improving market trends, Gilead raised its 2026 sales guidance for Yeztugo to $1 billion, signaling the product’s potential to achieve blockbuster status in its first full year on the market.

Consequently, Yeztugo sales likely recorded strong growth in the second quarter.

Driven by increased Yeztugo sales expectations and strong first-quarter HIV performance, Gilead now projects total 2026 HIV sales growth of approximately 8%, up from its prior guidance of 6% issued in February. The updated outlook includes an estimated 2% headwind related to the U.S. government’s Medicaid drug pricing agreement and proposed Affordable Care Act changes.

The Liver Disease portfolio includes drugs for chronic hepatitis C virus, chronic hepatitis B virus and chronic hepatitis delta virus.

Sales from this franchise have likely increased in the second quarter, driven by higher demand for Livdelzi (seladelpar) for the treatment of primary biliary cholangitis.  

Veklury sales likely remained highly variable.

Cell Therapy product sales (Yescarta and Tecartus) have likely decreased in the to-be-reported quarter due to competitive headwinds, both in the United States and internationally.

The Zacks Consensus Estimate and our model estimate for Cell Therapy product sales are pinned at $417 million and $419 million, respectively.

Trodelvy, indicated for second-line metastatic triple-negative breast cancer and pre-treated HR+/HER2- metastatic breast cancer, likely experienced strong demand in the second quarter, similar to the first quarter. The Zacks Consensus Estimate and our estimate for Trodelvy sales are pinned at $448 million and $427 million, respectively.

R&D expenses might have increased in the second quarter, caused by higher investment in virology clinical manufacturing, partially offset by lower oncology clinical study activity. SG&A expenses, too, must have increased, reflecting higher investments in sales and marketing to support commercial launches.

GILD’s Price Performance and Valuation

Shares of GILD have risen 9.4% year to date compared with the industry’s growth of 2%. The stock has outperformed the sector and the S&P 500 in this time frame.

GILD's Outperforms Industry, Sector & S&P 500 Index 

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Going by the price/earnings ratio, GILD’s shares currently trade at 25.48X forward earnings, higher than its mean of 12.01X but lower than 19.11X for the large-cap pharma industry.

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Investment Thesis for GILD

Gilead Sciences has a market-leading HIV portfolio that continues to deliver strong growth, supported by sustained demand for its flagship therapies. The company's ongoing innovation in HIV treatment has been well received by investors, while the strong initial launch of Yeztugo has provided an additional boost to the franchise.

Gilead is also investing to further strengthen its HIV leadership through internal pipeline development and its collaboration with Merck MRK. Potential approvals of new HIV therapies should reinforce the company's dominant position in the market.

Beyond HIV, Gilead is making steady progress in diversifying its revenue base. Strong uptake of Livdelzi has strengthened its liver disease portfolio.

In oncology, Trodelvy continues to gain market share in second-line metastatic breast cancer and recently secured FDA approval for an expanded label in the first-line treatment of adults with unresectable locally advanced or metastatic triple-negative breast cancer (mTNBC).

This followed a similar label expansion by the European Commission, significantly broadening Trodelvy's addressable market by moving the therapy into the first-line setting, where treatment options have historically been limited. These developments support Gilead's strategy of building a stronger oncology franchise and reducing its dependence on HIV revenues.

The company's strategic acquisitions and partnerships further enhance its long-term growth prospects. However, Gilead's Cell Therapy franchise, comprising Yescarta and Tecartus, continues to face competitive pressures in both the United States and Europe, which might have weighed on recent sales. Despite these challenges, the strength of Gilead's HIV business, expanding oncology portfolio and disciplined business development strategy position the company for sustained long-term growth.

Stay Invested in GILD Stock

Continued innovation across Gilead's HIV portfolio should drive sustained growth despite intensifying competition from GSK plc GSK.

GSK continues to expand its HIV business, fueled by strong demand for its long-acting injectable therapies, Cabenuva and Apretude, as well as Dovato, which have more than offset the ongoing decline in Triumeq sales.

Gilead's strategic acquisitions and partnerships to diversify its revenue base further strengthen its long-term growth outlook.

However, we recommend that prospective investors adopt a wait-and-watch approach, as Gilead's Cell Therapy business continues to face competitive pressures.

For existing shareholders, holding the stock appears prudent, supported by the company's solid HIV franchise, pipeline strength and attractive dividend yield.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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