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Veeva Systems (VEEV) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Veeva Systems (VEEV) closed at $284.68, marking a -0.9% move from the previous day. This change lagged the S&P 500's daily gain of 1.2%. At the same time, the Dow added 0.53%, and the tech-heavy Nasdaq gained 1.64%.

Prior to today's trading, shares of the provider of cloud-based software services for the life sciences industry had gained 2.16% over the past month. This has outpaced the Computer and Technology sector's loss of 1.12% and the S&P 500's loss of 2.23% in that time.

VEEV will be looking to display strength as it nears its next earnings release. On that day, VEEV is projected to report earnings of $0.68 per share, which would represent year-over-year growth of 13.33%. Our most recent consensus estimate is calling for quarterly revenue of $361.46 million, up 28.67% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.68 per share and revenue of $1.42 billion. These totals would mark changes of +22.37% and +28.61%, respectively, from last year.

Any recent changes to analyst estimates for VEEV should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. VEEV is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, VEEV is holding a Forward P/E ratio of 107.19. Its industry sports an average Forward P/E of 81.39, so we one might conclude that VEEV is trading at a premium comparatively.

Meanwhile, VEEV's PEG ratio is currently 7.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 6.48 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 159, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research