Pharma giant Gilead Sciences delivered a big earnings beat last quarter, as IBD reported earlier. It reversed from a loss in late 2021 to a small gain in Q1, crushing analysts estimates. Reflecting that beat, on Thursday Gilead stock's Relative Strength (RS) Rating climbed to 73, up from 70 the day before. The question now: Will it build on that strength or, in sync with the current severe market correction, fall back again?
Gilead Stock's Price Performance Rising
The new 73 RS Rating shows that Gilead stock outperformed 73% of all stocks in terms of stock price performance over the past year. Market research shows that stocks that go on to make the biggest gains typically have an RS Rating north of 80 as they begin their biggest climbs. See if Gilead Sciences can continue to rebound and clear that threshold.
Among its other key ratings, Gilead stock has a 65 Composite Rating, putting it in the top 35% of companies on a group of the five key ratings that IBD uses. It boasts a best-possible A SMR Rating (sales+profit margins+return on equity), on an A to E scale with A tops. Its C Accumulation/Distribution Rating shows that roughly as many institutional investors are buying its shares as selling.
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Gilead stock is trying to complete a consolidation with a 74.22 buy point. See if the stock can clear the breakout price in heavy trading. Gilead closed with a fractional gain Thursday, to 63.27.
Rebounding From Fluke Quarter?
Gilead Sciences saw both earnings and sales growth rate rise last quarter vs. the prior quarter. Earnings per share in its most recent quarter rose 4%, reversing from a 68% drop the prior quarter. Sales grew 3% on a year-over-year basis to $6.59 billion, reversing its 2% drop the previous period. It remains to be seen whether the late 2021 weakness is a fluke. The two quarters before it reported EPS gains of 68% and 26%, on revenue increases of 21% and 13%.
Gilead stock holds the No. 37 rank among its peers in the Medical-Biomed/Biotech industry group. Pacira Pharmaceuticals and Regeneron Pharmaceutical are among the group's highest-rated stocks.
As you try to find the best stocks to buy and watch, keep a close on eye on relative price strength.
IBD's unique RS Rating measures market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the last 52 weeks matched up against all other stocks.
