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Veeva Systems (VEEV) Gains From Solid Results for Fiscal Q4

Zacks Equity Research

On Mar 15, we issued an updated research report on Veeva Systems Inc. VEEV. A strong fiscal fourth-quarter show and product portfolio currently favor this Zacks Rank #2 (Buy) company.

What’s Favoring the Stock?

Veeva Systems ended the fiscal fourth quarter on a strong note. The company’s adjusted earnings per share came in at 45 cents per share, outpacing the Zacks Consensus Estimate of 31 cents. The bottom line also increased a whopping 87.5% on a year-over-year basis.

Total revenues came in at $232.3 million, beating the Zacks Consensus Estimate of $228 million. On a year-over-year basis, the top line improved 25%.

Reflective of these, the company issued a strong guidance for fiscal 2020.

For first-quarter fiscal 2020, Veeva Systems expects total revenues between $238 million and $239 million. Adjusted earnings per share are expected between 44 cents and 45 cents. Adjusted operating income is projected in the $85-$86 million band.

Revenues are expected between $1.02 billion and $1.03 billion for fiscal 2020. For the fiscal year, adjusted earnings per share are anticipated in the range of $1.91-$1.94.

Management expects Subscription revenue growth of 21-22% for fiscal 2020. Commercial Cloud subscription revenues are expected to rise 10%.

Moreover, Veeva Systems’ broad solution portfolio includes Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData. Another new cloud application of the company is Veeva Vault Training, designed to simplify role-based training across life sciences organizations and help quality teams remain audit-ready and compliant.

It is encouraging to note that, in fiscal 2020, Veeva Systems aims to release major capabilities within Vault CDMS which are expected to be real game changers for the life sciences industry.

Price Performance

Over the past year, shares of Veeva Systems have rallied 60.3% compared with the industry’s 14% gain. The current level is also higher than the S&P 500 index’s 4.3% rally.

Key Picks

Other top-ranked stocks in the broader medical space are Penumbra, Inc. PEN, Wright Medical Group N.V. WMGI and DexCom. Inc. DXCM. Notably, each of these stocks currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Penumbra’s long-term earnings growth rate is expected at 20.9%.

Wright Medical’s long-term earnings growth rate is estimated at 11.3%.

DexCom’s next-quarter earnings per share are projected to grow 120%.

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