Veeva: 2030 Targets and New Market Entry Excite Investors and Underpin Our Long-Term Outlook

Wide-moat Veeva Systems held its annual investor day on Nov. 7, during which it gave new details on where things are today and where the firm is heading. Management established a new long-term goal and now targets $6 billion in sales with at least a 35% adjusted EBIT margin by 2030. Looking at revenue from the most recent quarter, the target assumes about a 13% compound annual growth rate to the end of 2030. Veeva’s fiscal year ends in January, so the end of calendar 2030 lines up more or less with the end of fiscal 2031. This follows Veeva’s previous goal for 2025, which was set a number of years ago; the firm is tracking well to meet and even beat that target. Our valuation model incorporates a five-year revenue CAGR of about 13.5% through fiscal 2029, so we think this $6 billion target could be achievable. A 35% margin reflects about a 500-basis-point decline from today’s level, but management did note that the 35% is the low end of the expected range. We think the current margin trajectory gives the firm a lot of room to invest without risking landing below this floor. We have not made any material changes to our model and maintain our fair value estimate of $273 per share.