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Veeva Systems (VEEV) Rides High on Commercial Cloud Platform


On Oct 11, we issued an updated research report on Veeva Systems Inc. VEEV. We are upbeat about Veeva’s commercial cloud platform, which clinched multiple contracts around the world. The company has many core CRM projects on track with large pharma companies. Veeva currently carries a Zacks Rank #2 (Buy).

Headquartered in Pleasanton, CA, Veeva offers cloud-based software applications and data solutions for the life sciences industry. The life sciences industry has been quite slow in adopting cloud-based software as compared to other industries.

However, we believe that the industry is gradually realizing the benefits of cloud-based applications, particularly due to rising regulations and budgetary constraints. The cost-effectiveness of cloud-based applications over in-premise applications is attracting life science companies. Moreover, an uncertain regulatory environment has driven demand from software vendors that are well-acquainted with the industry trends.

The company’s industry-specific focus lends it a significant leverage in our view. This is aptly demonstrated by its strong sales growth aided by new business gains, better pricing and product innovation.

The company’s knowledge on different components of the life sciences industry is helping it to build targeted products. Notably, products like Veeva OpenData provide customer data to all healthcare professionals (HCP), healthcare organizations (HCO) and affiliations across the major life sciences markets.

Veeva is optimistic about its product pipeline that includes an exclusive range of products on its flagship Vault and Commercial cloud platforms. These products include Vault CTMS, Vault PromoMats Dam, CRM Engage Meeting and CRM Engage Webinar.

Share Price & Estimate Revision

Veeva’s share price movement continues to be robust. The company has gained 41.1% year to date, surpassing the broader industry’s 20.1%. The current level is also higher than the S&P 500's return of 13.8%.

The Zacks Consensus Estimate for the full year inched up 3.6% to close at 87 cents per share in the last two months.

Key Picks

A few better-ranked stocks in the broader medical sector are SONOVA HOLDING SONVY, IDEXX Laboratories, Inc. IDXX and Luminex Corporation LMNX. SONOVA and Luminex have a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SONOVA represented a solid return of 14.5% over the last year. The company has a long-term expected earnings growth rate of 7%.

IDEXX Laboratories has an average earnings beat of 9.3% over the trailing four quarters. It has a long-term expected earnings growth rate of 19.8%.

Luminex came up with a positive earnings surprise of 188.9% in the last quarter. The stock has a long-term expected earnings growth rate of 16.3%.

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