Gilead Sciences, Inc. (GILD) vs Eli Lilly and Company (LLY): Which Is the Better Buy in 2026?
As of 2026-06-19, GILD is undervalued at $124, with a DCF intrinsic value of $645 and a margin of safety of 81%. LLY is fairly valued at $1099, with an intrinsic value of $1143 and a margin of safety of 4%. Of the two, GILD has the wider margin of safety.
Rewards
- ★Gilead Sciences, Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 79.4% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Gilead Sciences, Inc. scores 92/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
- ★Eli Lilly and Company has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 82.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Eli Lilly and Company scores 73/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠FCF yield of 5.2% suggests reasonable valuation assuming continued moderate growth.
- ⚠PEG ratio of 2.14 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠7 insider sales totaling $9.6M with no purchases in the past 3 months — insiders are reducing their exposure.
- ⚠FCF yield of 0.9% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Insiders have sold $18.6M worth of stock in the past 3 months — significant insider liquidation.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $124?
The market implies +4.2% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +8.3%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $1099?
The market implies +20.0% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +31.4%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Margin Stability is the standout factor.
Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: GILD vs LLY
Is Gilead Sciences, Inc. or Eli Lilly and Company more undervalued in 2026?▼
Based on our discounted cash flow model, GILD trades at a 80.8% margin of safety (intrinsic value $645 vs. price $124), compared to LLY's 3.9% margin of safety (intrinsic $1143 vs. $1099).
Which stock has a wider economic moat, Gilead Sciences, Inc. or Eli Lilly and Company?▼
GILD scores 92/100 (Wide moat), while LLY scores 73/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which company has better free cash flow, Gilead Sciences, Inc. or Eli Lilly and Company?▼
Gilead Sciences, Inc. (GILD) generates a 5.2% free cash flow yield, compared to Eli Lilly and Company's 0.9%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Gilead Sciences, Inc. or Eli Lilly and Company?▼
LLY earns 37.8% ROIC versus GILD's 20.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Gilead Sciences, Inc.'s or Eli Lilly and Company's?▼
GILD's dividend earns a safety score of 94/100 (Very Safe), compared to LLY's 64/100 (Safe). GILD has raised its dividend for 3 consecutive years.