Here's Why You Should Retain Veeva Systems (VEEV) Stock Now
Veeva Systems Inc. VEEV is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by a solid third-quarter fiscal 2024 performance and strategic deals are expected to contribute further. Stiff competition and data security threats persist.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 16.3% compared with 72.4% growth of the industry and a 22.9% rise of the S&P 500 composite.
The renowned provider of cloud-based software applications and data solutions for the life sciences industry has a market capitalization of $30.11 billion. The company projects 24.6% growth for the next five years and expects to maintain its strong performance. It delivered an earnings surprise of 9.6% for the past four quarters, on average.
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Let’s delve deeper.
Strong Product Portfolio: We are optimistic about Veeva Systems’ unique solutions, which include Veeva Vault, Veeva CRM (customer relationship management), Veeva Network and Veeva OpenData.
On the third-quarter fiscal 2024 earnings call this month, Veeva Systems’ management confirmed that the company has made several important product strategy decisions in the last two quarters. In Commercial Cloud, the company announced adding Marketing Automation and Patient CRM, while expanding Data Cloud to clinical.
Strategic Deals: We are upbeat about Veeva Systems’ inking of a slew of notable deals. This month, the company announced that Recipharm will be using Veeva Vault QMS, Veeva Vault QualityDocs and Veeva Vault Training to streamline its quality operations.
In November, Veeva Systems announced that GSK will be one of the biopharma companies to migrate to Veeva Vault CRM.
Strong Q3 Results: Veeva Systems’ solid third-quarter fiscal 2024 results buoy optimism. The company saw an uptick in the overall top and bottom lines and robust performances by both segments during the quarter. The company continued to benefit from its flagship Vault platform. Veeva Systems’ continued strength in its Commercial Solutions with new customer additions and strong win rates in Veeva CRM were also seen.
Downsides
Data Security Threats: Veeva Systems’ solutions involve the storage and transmission of its customers’ proprietary information and personal information of medical professionals, patients and clinical trial participants, and other sensitive information. Unauthorized access or other security breaches or incidents could damage the company’s reputation. The company may be unable to adequately anticipate security threats or implement adequate preventative measures, in part because the techniques used to obtain unauthorized access or sabotage systems change frequently and are becoming increasingly sophisticated and complex, and generally are not identified until they are launched against a target.
Stiff Competition: Veeva Systems operates in a highly competitive market. In new sales cycles within the company’s largest product categories, it competes with other cloud-based solutions from providers that make applications for the life sciences industry. The company’s Commercial Cloud and Veeva Vault application suites also compete to replace client-server-based legacy solutions offered by large companies and other smaller application providers.
Estimate Trend
Veeva Systems is witnessing a positive estimate revision trend for fiscal 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1.3% north to $4.73.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2024 revenues is pegged at $620.8 million, suggesting a 10.2% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, HealthEquity, Inc. HQY and Integer Holdings Corporation ITGR.
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 42% compared with the industry’s 7.5% rise in the past year.
HealthEquity, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 27.5%. HQY’s earnings surpassed estimates in each of the trailing four quarters, with the average being 16.5%.
HealthEquity has gained 6% against the industry’s 8.8% decline over the past year.
Integer Holdings, flaunting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 45.6% compared with the industry’s 2.2% rise in the past year.
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DaVita Inc. (DVA) : Free Stock Analysis Report
Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
HealthEquity, Inc. (HQY) : Free Stock Analysis Report
Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
