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Veeva (VEEV) Down 8.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Veeva Systems (VEEV - Free Report) . Shares have lost about 8.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Veeva due for a breakout? 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 Q2 Earnings Beat Estimates, '22 View Up
Veeva Systems reported adjusted earnings per share of 94 cents in the second quarter of fiscal 2022, reflecting an improvement of 30.6% from the year-ago earnings per share of 72 cents. Adjusted earnings per share surpassed the Zacks Consensus Estimate by 9.3%.
GAAP earnings per share in the second quarter was 67 cents, up by 15.5% from the year-ago earnings per share of 58 cents.
Revenues
For the quarter, the company’s revenues totaled $455.6 million, outpacing the Zacks Consensus Estimate by 0.9%. On a year-over-year basis, the top line improved 28.8%.
The second-quarter top line was driven by continued strength in Veeva Development Cloud.
Segmental Details
Veeva Systems derives revenues from two operating segments — Subscription services, and Professional services and other.
In the fiscal second quarter, Subscription services revenues improved 29.3% from the year-ago quarter to $366.4 million on the back of record bookings in the previous two quarters.
Professional services and other revenues were up 27% year over year to $89.2 million, primarily resulting from continued strong demand for Veeva Development Cloud services.
Margin Details
In the quarter under review, Veeva Systems’ gross profit rose 30% to $333.5 million. Gross margin expanded 68 basis points (bps) to 73.2%.
Meanwhile, sales and marketing expenses rose 21.3% to $71.8 million. Research and development expenses went up 35.5% year over year to $94.9 million, while general and administrative expenses climbed 13.5% year over year to $42.2 million. Total operating expenses of $208.9 million increased 25.5% year over year.
Operating profit totaled $124.6 million, which surged 38.3% from the prior-year quarter. Operating margin in the second quarter expanded 188 bps to 27.4%.
Financial Position
The company exited the fiscal 2022 second quarter with cash and cash equivalents, and short-term investments of $2.26 billion compared with $2.15 billion at the end of fiscal 2022 first quarter.
Cumulative net cash provided by operating activities at the end of the second quarter of fiscal 2022 was $597.5 million compared with $387.5 million in the year-ago period.
Guidance
On the back of its fiscal second-quarter performance, Veeva Systems has provided its financial outlook for fiscal third quarter and has also upped its full-year projections.
For the third quarter of fiscal 2022, the company expects total revenues in the range of $464 million-$466 million. The Zacks Consensus Estimate for the same is currently pegged at $459.4 million.
Adjusted earnings per share is projected to lie within 87-88 cents. The Zacks Consensus Estimate for the metric is pegged at 86 cents.
For fiscal 2022, revenues are expected in the range of $1,830 million-$1,835 million (up from the previously issued guidance range of $1,815 million-$1,825 million). The Zacks Consensus Estimate for the same is currently pegged at $1.82 billion.
Adjusted earnings per share for the year is expected to be $3.57, up from the previously provided estimate of $3.49. The Zacks Consensus Estimate for the same currently stands at $3.49.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Veeva has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
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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Veeva (VEEV) Down 8.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Veeva Systems (VEEV - Free Report) . Shares have lost about 8.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Veeva due for a breakout? 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 Q2 Earnings Beat Estimates, '22 View Up
Veeva Systems reported adjusted earnings per share of 94 cents in the second quarter of fiscal 2022, reflecting an improvement of 30.6% from the year-ago earnings per share of 72 cents. Adjusted earnings per share surpassed the Zacks Consensus Estimate by 9.3%.
GAAP earnings per share in the second quarter was 67 cents, up by 15.5% from the year-ago earnings per share of 58 cents.
Revenues
For the quarter, the company’s revenues totaled $455.6 million, outpacing the Zacks Consensus Estimate by 0.9%. On a year-over-year basis, the top line improved 28.8%.
The second-quarter top line was driven by continued strength in Veeva Development Cloud.
Segmental Details
Veeva Systems derives revenues from two operating segments — Subscription services, and Professional services and other.
In the fiscal second quarter, Subscription services revenues improved 29.3% from the year-ago quarter to $366.4 million on the back of record bookings in the previous two quarters.
Professional services and other revenues were up 27% year over year to $89.2 million, primarily resulting from continued strong demand for Veeva Development Cloud services.
Margin Details
In the quarter under review, Veeva Systems’ gross profit rose 30% to $333.5 million. Gross margin expanded 68 basis points (bps) to 73.2%.
Meanwhile, sales and marketing expenses rose 21.3% to $71.8 million. Research and development expenses went up 35.5% year over year to $94.9 million, while general and administrative expenses climbed 13.5% year over year to $42.2 million. Total operating expenses of $208.9 million increased 25.5% year over year.
Operating profit totaled $124.6 million, which surged 38.3% from the prior-year quarter. Operating margin in the second quarter expanded 188 bps to 27.4%.
Financial Position
The company exited the fiscal 2022 second quarter with cash and cash equivalents, and short-term investments of $2.26 billion compared with $2.15 billion at the end of fiscal 2022 first quarter.
Cumulative net cash provided by operating activities at the end of the second quarter of fiscal 2022 was $597.5 million compared with $387.5 million in the year-ago period.
Guidance
On the back of its fiscal second-quarter performance, Veeva Systems has provided its financial outlook for fiscal third quarter and has also upped its full-year projections.
For the third quarter of fiscal 2022, the company expects total revenues in the range of $464 million-$466 million. The Zacks Consensus Estimate for the same is currently pegged at $459.4 million.
Adjusted earnings per share is projected to lie within 87-88 cents. The Zacks Consensus Estimate for the metric is pegged at 86 cents.
For fiscal 2022, revenues are expected in the range of $1,830 million-$1,835 million (up from the previously issued guidance range of $1,815 million-$1,825 million). The Zacks Consensus Estimate for the same is currently pegged at $1.82 billion.
Adjusted earnings per share for the year is expected to be $3.57, up from the previously provided estimate of $3.49. The Zacks Consensus Estimate for the same currently stands at $3.49.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Veeva has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
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.