It has been about a month since the last earnings report for Veeva Systems (VEEV). Shares have added about 1.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Veeva due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Veeva Systems Q3 Earnings and Revenues Beat Estimates
Veeva Systems, Inc. reported third-quarter fiscal 2021 adjusted earnings per share of 78 cents, beating the Zacks Consensus Estimate by 14.7%. Moreover, the metric surged 30% on a year-over-year basis.
The company’s revenues totaled $377.5 million, outpacing the Zacks Consensus Estimate by 4.4%. On a year-over-year basis, the top line improved 34.4%.
Fiscal third-quarter subscription service revenues summed $302.9 million, up 34% year over year.
Professional Service and Others
Professional Service revenues rose almost 37.6% to $74.6 million from the year-ago figure.
Per management, solid performance by Veeva Commercial Cloud and Veeva Vault drove revenues across all segments.
In the reported quarter, gross profit increased 32.2% year over year to $274.5 million. Gross margin was 72.7%, which contracted 118 basis points (bps).
Total operating cost came at $173.2 million, up 36.6%.
Operating profit totaled $101.3 million, up 25.4% year over year. In the quarter under review, operating margin fell 193 bps to 26.8%.
The company exited the fiscal third quarter with cash and cash equivalent of $634.3 million compared with $795.8 million at the end of the fiscal second quarter.
Cumulative net cash provided by operating activities came in at $482.9 million, up from $398.3 million at the end of the year-ago period.
For the fourth quarter of fiscal 2021, Veeva Systems expects revenues between $378 and $380 million. The Zacks Consensus Estimate for the same stands at $367.9 million.
Adjusted EPS is projected between 67 and 68 cents. The Zacks Consensus Estimate for the metric is pegged at 62 cents.
Adjusted operating income is estimated between $136 and $138 million.
For fiscal 2021, revenues are expected within $1.44 and $1.45 billion (up from the previously-issued range of $1.41-$1.42 billion). The Zacks Consensus Estimate for the same is pinned at $1.42 billion.
Adjusted EPS is expected in the range of $2.83 and $2.84 (up from the previously guided range of $2.64-$2.67). The Zacks Consensus Estimate for the same stands at $2.68.
Adjusted operating income is expected between $566 and $568 million (up from previously guided range of $540 million and $545 million).
For fiscal 2022, revenues are expected within $1.70 and $1.72 billion.The Zacks Consensus Estimate for the same is pinned at $1.70 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 14.03% due to these changes.
At this time, Veeva has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Veeva has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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