U.S. Markets closed

Veeva Systems (VEEV) Q1 Earnings Top Estimates, View Strong

Zacks Equity Research

Veeva Systems Inc. VEEV reported first-quarter fiscal 2020 earnings per share (EPS) of 50 cents, well ahead of the Zacks Consensus Estimate of 45 cents. The metric shot up 61.3% on a year-over-year basis.

This Zacks Rank #2 (Buy) company’s revenues totaled $244.8 million, outpacing the Zacks Consensus Estimate of $238.7 million. On a year-over-year basis, the top line improved 25.2%.

Segmental Details

Subscription Service

First-quarter subscription service revenues summed $198.1 million, up 27% year over year. Per management, the solid momentum in bookings was maintained in the quarter.

Professional Service and Others

Professional Service revenues rose almost 17.9% to $46.6 million from the figure registered in the year-ago quarter.

Per management, outperformance by Veeva Commercial Cloud and Veeva Vault drove revenues across all segments.

Veeva Systems Inc. Price, Consensus and EPS Surprise

 

Veeva Systems Inc. Price, Consensus and EPS Surprise

Veeva Systems Inc. price-consensus-eps-surprise-chart | Veeva Systems Inc. Quote

Margin Details

In the reported quarter, adjusted gross profit increased 31.9% to $183.3 million. Adjusted gross margin was 74.9%, which expanded 380 basis points (bps).

Adjusted operating income totaled $93.5 million, up 48.5% year over year. In the quarter under review, adjusted operating margin improved 600 bps to 38.2%.

However, adjusted operating expenses rose 18.2% year over year to $89.8 million.

Guidance

For the fiscal second quarter, revenues are expected within $259 million and $260 million. The Zacks Consensus Estimate for the same is pegged at $250.4 million, below the projected range.

Adjusted EPS is anticipated within 48-49 cents. The Zacks Consensus Estimate is pegged at 47 cents, lower than the guided range.

Adjusted operating income is projected within $94-$95 million.

For fiscal 2020, Veeva Systems expects revenues in the band of $1,045-$1,050 million. The Zacks Consensus Estimate for the same is pinned at $1,030 million, below the guided range.

Adjusted full-year EPS is expected within $2.01 and $2.03. The Zacks Consensus Estimate for the same stands at $1.94, much below the guided range.

Adjusted operating income is projected within $385 million and $390 million.

Wrapping Up

Veeva Systems ended the fiscal first quarter on a strong note, wherein earnings and revenues outpaced the Zacks Consensus Estimate. Also, the Subscription business segment performed impressively in the quarter. An impressive guidance for fiscal 2020 buoys optimism in the stock.

These apart, the company continues to benefit from its flagship Vault platform. In fact, Veeva Vault’s customers have increased manifold in recent times. Markedly, Veeva Systems’ unique solutions include Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData. The company’s new CRM Sunrise UI and Nitro look promising as well. In Commercial Cloud, Veeva Systems has secured a number of deals. The company is confident about growth in new markets with products like EDC, Safety, Nitro and Vault.

On the flip side, high expenses on the operational side are worrisome. Also, intense competition and a saturating life sciences market remain potent threats. Volatility in the foreign currency exchange rate is an added concern.

Earnings of MedTech Majors at a Glance

A few other top-ranked stocks which reported solid results this earning season are Masimo Corporation MASI, DENTSPLY SIRONA Inc. XRAY and CONMED Corporation CNMD. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masimo reported first-quarter 2019 adjusted EPS of 79 cents, which surpassed the Zacks Consensus Estimate of 75 cents. The company’s revenues improved 8.8% year over year to $231.7 million and edged past the Zacks Consensus Estimate of $223.6 million. The company carries a Zacks Rank of 2.

DENTSPLY reported adjusted EPS of 49 cents in the first quarter of 2019, beating the Zacks Consensus Estimate of 38 cents. Revenues came in at $946.2 million and surpassed the Zacks Consensus Estimate of $917.1 million. The company carries a Zacks Rank #2.

CONMED posted first-quarter 2019 adjusted EPS of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the Zacks Consensus Estimate of $213 million. The company sports a Zacks Rank of 1.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
 
Masimo Corporation (MASI) : Free Stock Analysis Report
 
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
CONMED Corporation (CNMD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research