Veeva Systems Inc. (VEEV Quick QuoteVEEV - Free Report) is well-poised for growth in the coming quarters, courtesy of a strong product portfolio. The optimism led by a solid fourth-quarter fiscal 2023 performance and strong product adoption are expected to contribute further. Stiff competition and forex woes persist.

Over the past year, this Zacks Rank #3 (Hold) stock has gained 7.4% against the 3.5% decline of the industry. The S&P 500 composite has risen 2.9% in the said time frame.

This renowned provider of cloud-based software applications and data solutions for the life sciences industry has a market capitalization of $28.65 billion. The company projects 23% growth for the next five years and expects to maintain its strong performance. It delivered an earnings surprise of 6.5% for the past four quarters, on average.

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Let’s delve deeper.

Strong Product Portfolio: We are optimistic about Veeva Systems’ unique solutions, which include Veeva Vault, Veeva CRM (customer relationship management), Veeva Network and Veeva OpenData. This month, the company announced the availability of Veeva Link Workflow, a no-code platform to build custom workflow applications on Veeva Link real-time data.

The same month, Veeva Systems announced the addition of Veeva Compass Prescriber and Veeva Compass National to its current Veeva Compass Patient offering.

Product Adoption: We are upbeat about Veeva Systems registering a robust adoption for its products over the past few months. This month, the company announced that Sanofi is implementing Veeva Vault QMS and Veeva Vault QualityDocs to modernize quality management across the company, including consumer healthcare.

In March, the company announced that more than 100 life sciences companies are using Veeva CRM Events Management to plan and execute in-person, virtual and hybrid events worldwide.

Strong Q4 Results: Veeva Systems’ solid fourth-quarter fiscal 2023 results buoy optimism. The company saw an uptick in the overall top and bottom lines and robust performances by both segments during the quarter. The company continued to benefit from its flagship Vault platform, which is encouraging. Veeva Systems’ continued strength in its Commercial Solutions, with new small- to mid-sized customer additions, looked promising.

Downsides

Forex Woes: Veeva Systems derives a major share of its revenues from international operations. Some of its international agreements provide payment denominated in local currencies and the majority of its local costs are also denominated in local currencies. Fluctuations in the value of the U.S. dollar versus foreign currencies may impact its operating results when converted into U.S. dollars.

Stiff Competition: Veeva Systems operates in a highly competitive market. In new sales cycles within the company’s largest product categories, it competes with other cloud-based solutions from providers that make applications for the life sciences industry. The company’s Commercial Cloud and Veeva Vault application suites also compete to replace client-server-based legacy solutions offered by large companies and other smaller application providers.

Estimate Trend

Veeva Systems is witnessing a negative estimate revision trend for fiscal 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 2.9% south to $4.33.

The Zacks Consensus Estimate for the company’s first-quarter fiscal 2024 revenues is pegged at $517.6 million, suggesting a 2.5% improvement from the year-ago quarter’s reported number.

This compares to our fiscal first-quarter revenue estimate of $515.1 million, suggesting a 2% improvement from the year-ago quarter’s reported number.

Key Picks

Some better-ranked stocks in the broader medical space are AmerisourceBergen Corporation , Merit Medical Systems, Inc. (MMSI Quick QuoteMMSI - Free Report) and Cardinal Health, Inc. (CAH Quick QuoteCAH - Free Report) .

AmerisourceBergen, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 8.9%. ABC’s earnings surpassed estimates in all the trailing four quarters, the average being 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AmerisourceBergen has gained 10.6% compared with the industry’s 8.9% rise in the past year.

Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.

Merit Medical has gained 39.1% compared with the industry’s 8.9% rise over the past year.

Cardinal Health, carrying a Zacks Rank #2 at present, has a long-term estimated growth rate of 12.4%. CAH’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 12.3%.

Cardinal Health has gained 51% compared with the industry’s 8.9% rise over the past year.