Veeva Systems Inc. (VEEV) on Q4 2023 Results - Earnings Call Transcript

Ato Garrett: Good afternoon, and welcome to Veeva's Fiscal 2023 Fourth Quarter and Full-Year Earnings Conference Call for the quarter and year ended January 31, 2023. As a reminder, we posted prepared remarks on Veeva's Investor Relations website just after 1:00 p.m. Pacific today. We hope you have had a chance to read them before the call. Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our Chief Executive Officer; Paul Shawah, EVP, Commercial Strategy; and Brent Bowman, our Chief Financial Officer. During this call, we may make forward-looking statements regarding trends, our strategies, and the anticipated performance of the business, including guidance regarding future financial results. These forward-looking statements will be based on our current views and expectations and are subject to various risks and uncertainties. Our actual results may differ materially. Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-Q. Forward-looking statements made during the call are being made as of today, March 1, 2023, based on the facts available to us today. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statements. We may discuss our guidance on today's call, but we will not provide any further guidance or update in our performance during the quarter, unless we do so in a public forum. On the call, we may also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release and in the supplemental investor presentation, both of which are available on our website. With that, thank you for joining us, and I'll turn the call over to Peter. Peter Gassner: Thank you, Ato, and welcome everyone to the call. We had a strong finish to the year with results ahead of our guidance for the quarter and year. Thanks to great execution by the Veeva teams across all areas. We're early in the significant industry cloud opportunity, and we are executing well. It was a breakout year for clinical data management, and we saw a great traction in newer areas such as Safety, Link and Compass. Our innovation engine is strong and our strategic partnerships with the industry are increasing. We issued guidance for fiscal '24 and initial guidance for fiscal '25 to provide context for the one-time revenue impacts to 2024 related to TFC. Normalizing for TFC and FX, we expect revenue to grow about 15% in fiscal '24 and at least 15% in fiscal '25. At this point, we'll open the call to your questions. Operator: Thank you sir. [Operator Instructions]. We'll go to Brent Bracelin, Piper Sandler. Operator: Next up is Brian Peterson from Raymond James. Operator: Next up is Joe Vruwink, Baird. Operator: Our next question is Ken Wong, Oppenheimer. Operator: The next question is Anne Samuel, JPMorgan. Operator: Will go to Stephanie Davis, SVB Securities. Operator: The next question is Gabriela Borges, Goldman Sachs. Operator: Craig Hettenbach from Morgan Stanley has the next question. Operator: We'll take our next question from Rishi Jaluria, RBC Capital Markets. Operator: Up next is Saket Kalia, Barclays. Operator: We will take a question next from Dylan Becker, William Blair. Operator: And we'll go back to Charles Rhyee, Cowen. Operator: Up next is Ryan MacDonald, Needham & Company. Operator: Next up is Joe Goodwin, JMP. Operator: Our next question is Stan Berenshteyn, Wells Fargo Securities. Operator: We'll go to Jack Wallace, Guggenheim Securities. Operator: Next up is Natalie Hao [ph], Bank of America. Operator: And that was our final question. I'd like to hand the call back to Mr. Peter Gassner for any additional or closing remarks. Peter Gassner: Thank you, everyone, for joining the call today, and thank you to our customers for your continued partnership and to the Veeva team for your outstanding work in the quarter. Thank you. Operator: And everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.
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Veeva Systems Inc. (NYSE:VEEV) Stock Analysis: A Look into the Future

Veeva Systems Inc. (NYSE:VEEV) is a prominent player in the cloud-based software industry, primarily serving the life sciences sector. The company offers solutions that help organizations manage their content and data efficiently. Veeva's competitors include companies like Oracle and SAP, which also provide enterprise software solutions.

On December 19, 2024, Jeff Garro from Stephens set a price target of $280 for VEEV, suggesting a potential upside of 27.46% from its current price of $219.67. Garro initiated coverage with an Overweight rating, indicating a positive outlook on the stock's future performance.

Veeva's sales growth is stabilizing in the mid-teens, and the company is returning to EBITDA margins exceeding 40%, as highlighted by Stephens. This strong financial performance is a key factor in the bullish outlook. The company's strategy to expand into new markets could further enhance its valuation multiple, which is currently below its 10-year average.

The stock has shown strong performance over the past six months, partly due to positive feedback on the Vault transition. Despite a recent decrease of $1.87 or -0.84%, VEEV's market capitalization remains robust at approximately $35.66 billion. The stock has fluctuated between $218.11 and $225.97 today, with a trading volume of 1,103,415 shares.

Over the past year, VEEV has experienced a high of $258.93 and a low of $170.25. This range reflects the stock's volatility and potential for growth. Stephens believes that Veeva's strategic initiatives could elevate its valuation back towards its historical average, supporting the optimistic price target of $280.

Veeva Systems Inc. (NYSE:VEEV) Quarterly Earnings Preview

  • Earnings per share (EPS) is estimated to be $1.58, marking a 17.9% increase year-over-year.
  • Projected revenue of $688.44 million, reflecting an 11% year-over-year growth.
  • Veeva Systems showcases a strong financial position with a debt-to-equity ratio of just 0.002 and a current ratio of about 5.01.

Veeva Systems Inc. (NYSE:VEEV) is a prominent player in the cloud-based software industry, primarily serving the life sciences sector. The company provides solutions for customer relationship management, content management, and data analytics. Veeva's competitors include companies like Salesforce and Oracle, which also offer cloud-based solutions across various industries.

On December 4, 2024, VEEV is set to release its quarterly earnings, with Wall Street analysts estimating an earnings per share (EPS) of $1.58. This represents a significant 17.9% increase from the same period last year, as highlighted by Zacks Investment Research. The revenue is projected to be around $688.44 million, reflecting an 11% year-over-year growth.

The stability in the consensus EPS estimate over the past month suggests that analysts have maintained their initial projections. This stability is crucial as empirical research shows a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock. Veeva Systems has a history of delivering impressive earnings surprises, which could lead to an earnings beat in the upcoming report.

Veeva Systems' financial metrics indicate a strong market valuation. The company has a price-to-earnings (P/E) ratio of approximately 59.78, meaning investors are willing to pay nearly 60 times the company's earnings over the past twelve months. The price-to-sales ratio is about 14.31, and the enterprise value to sales ratio is approximately 13.88, reflecting the company's valuation in relation to its revenue.

Veeva Systems maintains a robust financial position with minimal debt, as indicated by a debt-to-equity ratio of just 0.002. The company also showcases strong liquidity, with a current ratio of about 5.01, meaning it has more than five times the current assets needed to cover its current liabilities. This financial strength positions Veeva well for future growth and stability.

Citi Raises Veeva Systems Price Target to $273 Ahead of Earnings

Citi analysts raised their price target on Veeva Systems (NYSE:VEEV) from $256 to $273, while maintaining a Buy rating, ahead of the company’s upcoming Q2/25 earnings, scheduled to be released on Wednesday.

The increased optimism ahead results stems from positive trends in Life Sciences demand and resilient demand across Veeva's product suite, as indicated by partner conversations.

Veeva's strong pipeline visibility for the second half of the year supports the analyst's outlook, which is considered conservative. The analysts expect a slight beat on billings and revenue, with steady guidance as new CFO Brian Van Wagener settles into his role. Despite no changes in estimates, the price target adjustment reflects continued confidence in Veeva's double-digit growth prospects and margin improvement potential.

Veeva Systems Stock Surges 17% on Q1 Beat

Veeva Systems (NYSE:VEEV) shares jumped more than 17% intra-day today after the company reported its Q1 results, with EPS of $0.91 coming in better than the Street estimate of $0.79. Revenue was $526.3 million, beating the Street estimate of $515.86 million.

Management reiterated that demand, and underlying KPIs (pipeline, win-rates, collections) remain consistent despite macro uncertainties. Management expects early customers to be live on Vault CRM and the Compass suite by next year.

For Q2/24, the company expects EPS to be in the range of $1.12-$1.13, compared to the Street estimate of $1.07, and revenue in the range of $580-$582 million, compared to the Street estimate of $580.31 million.

For the full year, the company expects EPS of $4.59, compared to the Street’s $4.32, and revenue of $2.36-$2.37 billion, compared to the Street’s $2.36 billion.

Veeva Systems Inc. Shares Closed 5% Lower Despite Strong Q2 Beat

Veeva Systems Inc. (NYSE:VEEV) shares closed more than 5% lower today despite the company’s reported Q2 results, which were above the Street estimates. The company delivered quarterly $0.94 EPS, beating the consensus estimate of $0.87, and revenue of $455.6 million (up 29% year-over-year), versus the consensus estimate of $451.93 million.

The company projects Q3 revenue to range from $464 million to $466 million, which is better than the Street estimate of $456.94 million.

For the full 2022-year the management of the company expects an EPS of $3.57, better than the consensus estimate of $3.50, and revenue of $1.83 billion-$1.835 billion, compared to the consensus of $1.82 billion.