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What's in the Cards for Veeva Systems (VEEV) in Q3 Earnings?

Zacks Equity Research

Veeva Systems Inc. VEEV is scheduled to release third-quarter fiscal 2020 results on Nov 26, after the closing bell.

In the last reported quarter, the company delivered a positive earnings surprise of 12.2%. Further, it has a positive earnings surprise of 13.6%, on average, for the trailing four quarters.

Q3 Estimates

The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings is pegged at 54 cents, suggesting an improvement of 20% from the year-ago quarter. The same for revenues is pegged at $275.4 million, indicating growth of 22.5% from the year-ago reported figure.

Veeva Systems Inc. Price and EPS Surprise

 

Veeva Systems Inc. Price and EPS Surprise

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

Factors to Influence Q3

Veeva Systems unique product portfolio, comprising Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData, is likely to have driven results in the fiscal third quarter.

Veeva Systems’ first cloud-based content management system, built specifically for life sciences — Veeva Vault — is likely to have added new Vault customers in the fiscal third quarter.

Additionally, Veeva Andi — the new AI application released by the company in first-quarter fiscal 2020, which delivers insights and next best action suggestions right in Veeva CRM — is likely to have contributed to the fiscal third-quarter results.

Management stated 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.

In the fiscal third quarter, the company is likely to have witnessed strength across each Vault application area, including continued momentum in more established products and early success for new products. This in turn is likely to get reflected in the fiscal third-quarter top line.

Veeva Systems’ subscription revenues are likely to have benefited from increase in bookings in the fiscal third quarter. In fact, the company projects subscription revenue growth for fiscal 2020 between $871 million and $874 million.

Further, Veeva Commercial Cloud and Veeva Vault are likely to have driven Professional Service and Other segment’s revenues in the to-be-reported quarter.

Possible strength in bookings and outperformance in services revenues are likely to get reflected in calculated billings in the to-be-reported quarter. In fact, the company anticipates calculated billings of about $185 million in the fiscal third quarter.

However, intense competition across most of the product lines is likely to have limited Veeva Systems’ overall performance.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.

Earnings ESP: Veeva Systems has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: Veeva Systems carries a Zacks Rank #3.

Peer Releases

Here are three stocks that reported solid results in this earnings season.

Edwards Lifesciences Corporation EW delivered fourth-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Fourth-quarter net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%. The company sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher Scientific Inc. TMO delivered fourth-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%. The company carries a Zacks Rank of 2.

ResMed Inc. RMD reported fourth-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%. The company carries a Zacks Rank #2.

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Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
 
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