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Veeva Systems Inc Class A VEEV

Morningstar Rating
$187.17 −1.73 (0.92%)
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Company Report

Veeva Earnings: Service Challenges and Guidance Cut Spook Investors, but We Remain Bullish

Wide-moat Veeva Systems reported strong first-quarter earnings and marked a solid start to its fiscal year. Total sales of $650 million were up 23.6% year over year and came in above management’s previous guidance of $640 million-$643 million. That said, we saw another cut in full-year sales guidance. About two thirds of the change was attributed to worse-than-expected services demand with the remainder coming from stronger foreign-exchange headwinds. Albeit a small magnitude in the change— a decrease of $30 million to $2.70 billion-$2.71 billion from $2.725-$2.740 billion—this revision follows a cut in guidance from last November and we think the market showed a lot of pessimism. The stock was down about 10% afterhours and we think this somewhat demonstrates investors' lack of confidence in Veeva. However, we think this is an overreaction to solid quarterly results and the change in guidance doesn’t warrant the selloff. We aren't making any material changes to our model and maintain our fair value estimate of $270 per share.

Price vs Fair Value

VEEV is trading at a 285% premium.
Price
$188.00
Fair Value
$117.00
Uncertainty
High
1-Star Price
$862.60
5-Star Price
$599.00
Economic Moat
Dfhw
Capital Allocation
Zjvmwxntd

Bulls Say, Bears Say

Bulls

Veeva Vault continues to implement new products to its suite, which makes the offering even more attractive.

Bears

Moving its CRM from Salesforce’s platform to its Vault Platform could raise concerns for customers and lower its retention rate.

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News

Trading Information

Previous Close Price
$188.90
Day Range
$187.17191.51
52-Week Range
$162.89236.00
Bid/Ask
$186.91 / $187.29
Market Cap
$30.26 Bil
Volume/Avg
356,196 / 1.0 Mil

Key Statistics

Price/Earnings (Normalized)
34.62
Price/Sales
12.39
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Veeva is the global leading supplier of cloud-based software solutions for the life sciences industry. The company’s best-of-breed offerings address operating and regulatory requirements for customers ranging from small, emerging biotechnology companies to departments of global pharmaceutical manufacturers. The company leverages its domain expertise to improve the efficiency and compliance of the underserved life sciences industry, displacing large, highly customized and dated enterprise resource planning systems that have limited flexibility. Its two main products are Veeva CRM, a customer relationship management platform for companies with a salesforce, and Veeva Vault, a content management platform that tackles various functions within any life sciences company.
Sector
Healthcare
Industry
Health Information Services
Stock Style Box
Mid Growth
Total Number of Employees
7,172

Competitors

Valuation

Metric
VEEV
ORCL
CRM
Price/Earnings (Normalized)
34.6222.0826.81
Price/Book Value
6.2139.233.92
Price/Sales
12.396.606.63
Price/Cash Flow
35.1018.2516.97
Price/Earnings
VEEV
ORCL
CRM

Financial Strength

Metric
VEEV
ORCL
CRM
Quick Ratio
4.220.690.95
Current Ratio
4.290.851.11
Interest Coverage
3.9547.36
Quick Ratio
VEEV
ORCL
CRM

Profitability

Metric
VEEV
ORCL
CRM
Return on Assets (Normalized)
16.14%11.69%9.32%
Return on Equity (Normalized)
20.22%749.60%15.06%
Return on Invested Capital (Normalized)
19.96%20.33%12.53%
Return on Assets
VEEV
ORCL
CRM
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