When shares of a stock like Gilead Sciences (NASDAQ:GILD) nearly double in value in less than two years, it can take a lot to please investors. Last week, the drugmaker reported blowout second-quarter financial results -- but saw shares fall nearly 6% on the news.

Apparently, revenue and earnings growth topping 50% was not enough to satisfy the market. Lead HIV combination drug Truvada experienced 29% year-over-year sales growth and accounted for more than 40% of Gilead's drug sales in the second quarter.

Trading at 23 times its second-quarter earnings-per-share run rate of $1.68, yet growing its top and bottom lines at more than double this rate, shares of Gilead are now extremely enticing, priced at less than $40 a share. Gilead's sales guidance for all of 2007 ranges between $3.6 billion to $3.7 billion, at least a 38% jump over 2006. (This doesn't even include its fast-growing royalty revenues.)

Some potential new competition in the HIV space could come on the market in the next two years, including Pfizer's (NYSE:PFE) maraviroc. However, none of Gilead's lead HIV combination products is in any danger of losing first-in-class status. When you also consider that newly approved drugs like Letairis will just be entering the market, it's hard to argue that there's much wrong with Gilead operationally.

Looking too closely at quarterly financial results, and quibbling over whether revenue growth should have been 60% or 50%, is definitely a case of missing the forest for the trees. The only problem investors could have about Gilead right now is that it is not giving any cash back to shareholders. Other than that, it's hard to find fault with the company's performance or valuation.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Pfizer is an Inside Value selection. The Fool has a disclosure policy.

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