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Veeva Systems maintains stock target with Overweight rating on earnings beat

EditorNatashya Angelica
Published 29/08/2024, 15:02
VEEV
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On Thursday, KeyBanc Capital Markets maintained its positive stance on shares of Veeva Systems Inc (NYSE:VEEV), a cloud-computing company focused on pharmaceutical and life sciences industry applications. The firm reiterated an Overweight rating and a $200.00 price target on the stock.

Veeva Systems reported second-quarter results that exceeded expectations, with a revenue beat of approximately 1.2% and an earnings beat of around 3.9%. The company's success was attributed to strong performance in both its Commercial and R&D Solutions segments.

Veeva Systems' adjusted EBIT margins reached 41.4%, surpassing the consensus estimate of about 40.3%. Notably, general and administrative expenses were effectively managed during the quarter, contributing to the company's robust bottom-line results.

Moreover, Veeva Systems experienced solid normalized billings for the quarter and modestly increased its full-year guidance by $15 million, which is nearly equivalent to the size of the current quarter's beat.

For the third quarter, Veeva Systems provided guidance that aligns closely with consensus estimates on revenue and anticipates slightly higher margins. The company also slightly raised its full-year revenue forecast at the lower end of the range. This updated guidance comes after the market had previously priced in potential concerns following the announcement of a new CFO in July, with some investors fearing a possible downward revision.

Veeva Systems' updated outlook and second-quarter performance demonstrate the company's continued growth and operational efficiency. With the reaffirmed Overweight rating and price target, KeyBanc Capital Markets signals confidence in Veeva Systems' market position and financial health.

In other recent news, Veeva Systems has experienced a flurry of analyst upgrades and price target revisions following strong second quarter results. TD Cowen raised its price target to $192, citing the company's solid performance and upward revision of its fiscal year 2025 revenue guidance.

Piper Sandler increased its target to $230, noting deal momentum with top clients and improved operating margins. Baird adjusted its target to $251, highlighting an 11% year-over-year growth in billings and a significant rise in earnings per share, while Evercore ISI raised its price target to $220, emphasizing robust bookings and a revised subscription revenue guidance.

Veeva Systems reported total revenue of $676.2 million, marking a 15% year-over-year increase, and earnings per share of $1.62, exceeding expectations. In addition, the company launched new products, including Veeva Site Connect and Service Center, and plans to release the next Vault CRM in the fourth quarter.

The company's annual guidance remained mostly unchanged at $2.707 billion at the midpoint, with a slight increase in operating income and EPS forecasts. These are recent developments in Veeva Systems' ongoing growth and strategic expansions.

InvestingPro Insights

As Veeva Systems (NYSE:VEEV) continues to exhibit strong financial health and market position, insights from InvestingPro further enrich the analysis of the company's performance. According to real-time data, Veeva Systems boasts a substantial market capitalization of $34.69 billion, reflecting the company's significant presence in the cloud-computing sector.

The company's P/E ratio stands at 57.97, which, while indicating a high earnings multiple, aligns with the firm's robust revenue growth of 14.31% over the last twelve months as of Q1 2023. This growth is further exemplified by a notable quarterly revenue increase of 23.56% in Q1 2023.

InvestingPro Tips highlight two key aspects of Veeva Systems' financials. Firstly, the company holds more cash than debt on its balance sheet, which is a strong indicator of financial stability and risk management. Moreover, analysts predict the company will be profitable this year, which is consistent with the company's profitability over the last twelve months. These insights, among others available on InvestingPro, which lists a total of 11 additional tips for Veeva Systems, offer valuable context for investors considering the company's stock.

With a focus on the most relevant metrics and insights, the InvestingPro data and tips provide a comprehensive view of Veeva Systems' financial standing and future potential, supporting the positive outlook presented by KeyBanc Capital Markets.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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