Company Reports

Veeva announced on April 1 that Brent Bowman—the firm’s chief financial officer and principal financial officer, who has been serving in the position for over three years—will step down. The announcement noted that the departure was not a result of any misconduct or disagreements between Bowman and Veeva. During the search for a replacement, Tim Cabral, Veeva’s CFO from 2010 to 2020, will serve as interim CFO and PFO with Bowman remaining as an advisor to ensure a smooth transition. We believe Cabral will be an effective member during this changeover given he brings in decades of experience and knowledge, and has also served as a board member since January 2022.

Wide-moat Veeva Systems reported fourth-quarter earnings that came in slightly ahead of our expectations. Total sales of $630 million were up 11.9% year over year as both the subscription and services businesses outperformed management’s expected numbers. After adjusting our near-term assumptions and baking in the time value of money, we slightly raise up our fair value estimate to $270 per share from $267.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry. It provides an ecosystem of products to address the operating challenges and regulatory requirements that companies in the space face. Instead of focusing on a general, one-size-fits-all system, Veeva has created platforms that are purely designed to serve one industry. And this vertical focus has allowed the company to shape its products for its specific customers to fit their specific needs. Veeva is deeply penetrated in its addressable market, and its continued expanding portfolio of applications presents itself as one of the most attractive offerings in the space.

Wide-moat Veeva reported third-quarter earnings that were better than we expected. Total sales were up 11.6% year over year with both subscriptions and professional services providing a nice tailwind to the top line. A soft outlook for the rest of fiscal 2024, discussed during the firm’s investor day in November, was reiterated. This puts year-over-year growth for fourth-quarter subscription sales in double-digit territory but marks a flat growth for professional services. Many life sciences firms have called out cost-cutting measures to challenge difficult macroeconomic trends, such as limited funding in the biotech industry and high-interest rates, and we expect Veeva’s professional services segment to take a toll in the near term. We maintain our fair value estimate of $267 per share.

Wide-moat Veeva hosted an investor day and discussed certain near-term challenges as well as new product innovation that further bolsters the firm’s wide portfolio of products. After updating our model, we lightly cut our fair value estimate to $267 from $275.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry. It provides an ecosystem of products to address the operating challenges and regulatory requirements that companies in the space face. Instead of focusing on a general, one-size-fits-all system, Veeva has created platforms that are purely designed to serve one industry. And this vertical focus has allowed the company to shape its products for its specific customers to fit their specific needs. Veeva is deeply penetrated in its addressable market, and its continued expanding portfolio of applications presents itself as one of the most attractive offerings in the space.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry. It provides an ecosystem of products to address the operating challenges and regulatory requirements that companies in the space face. Instead of focusing on a general, one-size-fits-all system, Veeva has created platforms that are purely designed to serve one industry. And this vertical focus has allowed the company to shape its products for its specific customers to fit their specific needs. Veeva is deeply penetrated in its addressable market, and its continued expanding portfolio of applications presents itself as one of the most attractive offerings in the space.

Wide-moat Veeva reported better-than-expected second-quarter results. Total sales were up 10.5% year over year as strong performance from R&D solutions continues to lift the company’s top line. Management raised the lower end of its total sales guidance by $5 million due to a more favorable full-year expectation of commercial business but that was already baked into our assumptions. We maintain our fair value estimate of $275 per share.

Wide-moat Veeva Systems reported first-quarter results that were slightly ahead of our expectations. Total sales were up 4.2% year over year driven from customer wins across its suite of applications. We maintain our fair value estimate of $275 per share.

Wide-moat Veeva ended fiscal 2023 with strong results. Total sales were up 16% year over year as subscription services and professional services posted strong results, up 16.3% and 14.9%, respectively. After adjusting for full-year results, we raise our fair value estimate to $275 from $265, roughly a 4% increase, due to time value of money and a slightly raised long-term outlook.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry. It provides an ecosystem of products to address the operating challenges and regulatory requirements that companies in the space face. Instead of focusing on a general, one-size-fits-all system, Veeva has created platforms that are purely designed to serve one industry. And this vertical focus has allowed the company to shape its products for its specific customers to fit their specific needs. Veeva is deeply penetrated in its addressable market, and its continued expanding portfolio of applications presents itself as one of the most attractive offerings in the space.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry. It provides an ecosystem of products to address the operating challenges and regulatory requirements that companies in the space face. Instead of focusing on a general, one-size-fits-all system, Veeva has created platforms that are purely designed to serve one industry. And this vertical focus has allowed the company to shape its products for its specific customers to fit their specific needs. Veeva is deeply penetrated in its addressable market, and its continued expanding portfolio of applications presents itself as one of the most attractive offerings in the space.

Wide-moat Veeva reported third-quarter results that were slightly ahead of our assumptions. Total sales were up 16% year-over-year, supported by subscription services and professional services both rising 16%. Management stated that they are tracking a year ahead of their 2025 revenue goal of $3 billion, and we attribute this to Veeva's quality products and consistent customer wins. Veeva continues to show its success in winning over new customers and penetrating its user base with additional products with a couple of key achievements during the quarter. For example, it established a 10-year strategic partnership with Merck that pushes Merck to use products from Veeva over other firms when they are fit for purpose, and the first top 20 pharmaceutical customer went live with Vault Safety. We are raising our fair value estimate to $265 from $257 to bake in the accelerated revenue run-rate target.

After taking a fresh look at our key valuation assumptions, we have lowered our fair value estimate roughly 7% to $257 per share due to our revised outlook of segment growth.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry. It provides an ecosystem of products to address the operating challenges and regulatory requirements that companies in the space face. Instead of focusing on a general one-size-fits-all system, Veeva has created platforms that are purely designed to serve one industry. And this vertical focus has allowed the company to shape its products for its specific customers to fit their specific needs. Veeva is deeply penetrated in its addressable market, and its continued expanding portfolio of applications presents itself as one of the most attractive offerings in the space.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry, providing an ecosystem of products to address the operating challenges and regulatory requirements that these companies face. Its highly specialized offerings for the life science industry allow companies to improve operational efficiency to get products to market faster while ensuring regulatory compliance and ultimately sell more effectively. Its effective technology and dominant position enable Veeva to generate excess returns commensurate with a wide-moat company. Its strong retention, continued development of new applications, increasing penetration with existing customers, addition of new customers, and expansion into industries outside of life sciences should allow the company to extend its market leadership, in our view.

Wide-moat Veeva reported decent second-quarter results, but foreign currency exposure and macroeconomic headwinds are pushing down revenue guidance for the full fiscal year 2023 by $30 million or about 1.5%, which will likely weigh on the stock price in the near term. Veeva saw revenue growth of 17% year over year and a decrease in operating income by 19% year over year (due to higher-than-expected litigation expenses). Although we made slight adjustments in our near-term assumptions to reflect the provided revenue guidance of $2.145 billion for the full fiscal year 2023, we are confident in Veeva’s long-term outlook and continued competitive advantage and maintain our $275 fair value estimate.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry, providing an ecosystem of products to address the operating challenges and regulatory requirements that these companies face. Its highly specialized offerings for the life science industry allow companies to improve operational efficiency to get products to market faster while ensuring regulatory compliance and ultimately sell more effectively. Its effective technology and dominant position enable Veeva to generate excess returns commensurate with a wide-moat company. Its strong retention, continued development of new applications, increasing penetration with existing customers, addition of new customers, and expansion into industries outside of life sciences should allow the company to extend its market leadership, in our view.

Veeva shares continue to look very attractive to us, as the market has continued to sour on technology stocks, beating down company shares over the past several months. Once again, the company's short-term performance was strong, and our long-term outlook remains very positive, as we see a substantial runway for growth over the next several years in the research and development software space. With no material change to our expectations, we maintain our $275 per share fair value estimate and wide moat rating.

Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry, providing an ecosystem of products to address the operating challenges and regulatory requirements that these companies face. Its highly specialized offerings for the life science industry allow companies to improve operational efficiency to get products to market faster while ensuring regulatory compliance and ultimately sell more effectively. Its effective technology and dominant position enable Veeva to generate excess returns commensurate with a wide-moat company. Its strong retention, continued development of new applications, increasing penetration with existing customers, addition of new customers, and expansion into industries outside of life sciences should allow the company to extend its market leadership, in our view.