Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Gilead Sciences, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.6% to 5.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 61, DPO 44, DIO 159). At a 7.5% WACC with mid-year discounting, the terminal value (79% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $153.19 per share, suggesting GILD is fairly valued by 11.3% at the current price of $137.65.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 10,850 | 11,520 | 12,121 | 12,860 | 13,537 | 13,875 |
| (−) Net Interest | 1,055 | 1,120 | 1,178 | 1,250 | 1,316 | 1,349 |
| (+) D&A | 596 | 609 | 600 | 627 | 676 | 693 |
| EBITDA | 12,500 | 13,248 | 13,899 | 14,737 | 15,528 | 15,916 |
| (−) Tax | 2,353 | 2,499 | 2,629 | 2,789 | 2,936 | — |
| (−) CapEx | 645 | 685 | 721 | 765 | 805 | — |
| (−) ΔWC | -2,252 | 434 | 389 | 479 | 438 | — |
| Free Cash Flow (FCF) | 11,754 | 9,631 | 10,160 | 10,704 | 11,349 | — |
| Peers' EBITDA Multiple | 14.8x | |||||
| Terminal Value | 236,039 | |||||
| WACC / Discount Rate | 7.51% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 11,336 | 8,639 | 8,477 | 8,307 | 8,192 | 164,323 |
| Enterprise Value | 209,275 | |||||
| Projection Period | 44,952 | 21.5% | ||||
| Terminal Value | 164,323 | 78.5% | ||||
| (−) Current Net Debt | 17,028 | |||||
| Equity Value | 192,247 | |||||
| (÷) Outstanding Shares | 1255M | |||||
| Fair Price | $153 | +11.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.8x | 12.8x | 14.8x | 16.8x | 18.8x |
|---|---|---|---|---|---|
| 5.5% | $129 | $148 | $168 | $187 | $207 |
| 6.5% | $123 | $142 | $160 | $179 | $197 |
| 7.5% | $118 | $136 | $153 | $171 | $189 |
| 8.5% | $113 | $130 | $146 | $163 | $180 |
| 9.5% | $108 | $124 | $140 | $156 | $172 |
Current price: $137.65. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.