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Veeva Systems Rides on Strong Q4 & Cloud-Based Applications

Zacks Equity Research
Updated

On Mar 7, we issued an updated research report on Veeva Systems Inc. VEEV. The stock sports a Zacks Rank #1 (Strong Buy).

Growing demand for cloud-based and Vault applications, product launches and international expansion are key positives. Further, the company exited fiscal 2018 on a solid note with revenues and earnings beating the consensus mark.

Q4 at a Glance

Veeva Systems reported fourth-quarter fiscal 2018 adjusted earnings of 23 cents per share. The bottom line beat the Zacks Consensus Estimate by a couple of cents and improved 4.5% from the year-ago quarter’s figure. Total revenues were $184.9 million, up 23.1% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $180 million. Veeva Systems’ strong growth in subscription revenues segment drove the metric.

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The company provided financial guidance for fiscal 2019 ending Jan 31, 2019. For the fiscal, total revenues are estimated in the band of $815-$820 million. Adjusted earnings are projected between $1.30 and $1.33 per share. The Zacks Consensus Estimate for the metric is pegged at $1.01 on a revenue estimate of $807.19 million. For first-quarter fiscal 2019, Veeva Systems expects total revenues in the range of $188-$189 million. Meanwhile, adjusted earnings are estimated between 30 cents and 31 cents.

Cloud-Based Applications

Recently, the company released its advanced Veeva Commercial Cloud offering, Veeva CRM Engage Webinar. According to the company, the product is a purpose-built application for life sciences to manage online events without the typical compliance risk.

Veeva Systems also released Veeva Vault PromoMats Brand Portal — a new cloud-based digital asset management capability — which helps brand managers create portals, organize and showcase content within Veeva Vault PromoMats.

The life sciences industry has been slow in adopting cloud-based software compared with other industries. However, we believe that the industry is gradually realizing the benefits of cloud-based applications, courtesy of rising regulations and budgetary constraints.

The cost-effectiveness of cloud-based applications over in-premise applications is attracting life science companies. Veeva Systems’ industry expertise and expanding product portfolio in cloud-based solutions are likely help it to fulfill growing demands over the long term.

Veeva Systems recently announced that Ora, Inc., a leading ophthalmic CRO, adopted the Veeva Vault Clinical Suite to unify its clinical systems and processes.

Price Performance

In the past year, Veeva Systems outperformed its industry. The company’s shares have returned 74%, higher than the industry’s 36.7%. The current level is also higher than S&P 500 index’s rally of 18.1%.

Other Key Picks

A few other top-ranked stocks in the broader medical sector are MEDNAX, Inc. MD, ICU Medical, Inc. ICUI and athenahealth, Inc. ATHN. All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

athenahealth has a projected long-term growth rate of 20.7%. The stock provided a positive earnings surprise of 73.4% in the last quarter.

MEDNAX has an expected long-term growth rate of 10%. The stock provided a positive earnings surprise of 3.6% in the last quarter.

ICU Medical has an expected long-term growth rate of 10%. The stock provided a positive earnings surprise of 204.1% in the last quarter.

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Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
 
athenahealth, Inc. (ATHN) : Free Stock Analysis Report
 
ICU Medical, Inc. (ICUI) : Free Stock Analysis Report
 
Mednax, Inc (MD) : Free Stock Analysis Report
 
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