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Factors Driving Veeva Stock More Than 20% in Three Months
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Shares of Veeva Systems (VEEV - Free Report) have risen 20.5% in the past three months, outperforming both the industry as well as the S&P 500 Index. The outperformance was primarily driven by its strong quarterly results during the second quarter of fiscal 2025, continued expansion of its product offerings and the addition of new partners.
VEEV’s Robust Results
Veeva reported better-than-expected earnings for the second quarter on Aug. 28, leading to a rise in share price. The company’s top line was up 15% compared to the prior-year quarter, primarily driven by a 19% increase in recurring subscriptions. Reported revenues also beat market expectations. The company expects subscription revenues to grow 15% in the third quarter.
Meanwhile, the strong growth in recurring revenues boosts optimism, implying strong revenue growth to continue in the upcoming quarters. The subscription model is helping the company retain customers as well as boost the lifetime value derived from each customer.
Subscription revenues are more reliable due to the auto-renewal option compared to license revenues that are primarily one-time in nature. The rising mix of subscription contributions in total revenues tends to be an important growth catalyst. The company signed more multi-year orders compared to historical trends, implying a steady revenue stream going forward.
Image Source: Zacks Investment Research
The strong top-line growth also helped VEEV in achieving a 32% improvement in its operating profit and nearly $850 million in free cash flow during the first two quarters of fiscal 2025. The company expects its adjusted operating margin to be 40% for fiscal 2025, implying a 440 basis points expansion compared to fiscal 2024.
The company also raised its revenue and earnings guidance on its second-quarter earnings call, buoyed by its sustained robust performance. Veeva now expects revenues for fiscal 2025 to be between $2,704 million and $2,710 million compared with the earlier guidance of $2,700-$2,710 million. The Zacks Consensus Estimate is currently pegged at $2.71 billion.
For fiscal 2025, Subscription revenues are now expected to be $2,257 million, higher than the previous outlook of $2,245 million. This consists of Commercial Solutions’ subscription revenues of around $1,090 million (up from the prior outlook of $1,080 million) and R&D Solutions’ subscription revenues of approximately $1,167 million (higher than the previous outlook of $1,165 million).
Adjusted EPS for fiscal 2025 is now expected to be $6.22, up from the previous guidance of $6.16. The Zacks Consensus Estimate is pegged at $6.21.
VEEV’s New Deals in the Past Three Months
Earlier this month, Veeva added powerful new capabilities and a streamlined site-centric experience to its Veeva Site Connect to simplify and standardize sponsor-site collaboration, thus taking a major step forward for clinical trial execution. The new capabilities and simple, standard site experience will likely reduce trial time and expense.
During the second quarter, Veeva partnered with Vita Global Sciences to provide service offerings. These deals are likely to enable Vita Global to establish a clinical data foundation, accelerate study builds and manage changes with no downtime for faster trials that can improve patient outcomes using Veeva Vault EDC.
Another company, Hangzhou Tigermed Consulting also signed a deal with VEEV to use Veeva Vault EDC as its technology foundation to modernize electronic data capture and simplify complex data management for faster study builds and mid-study amendments with zero downtime.
Industry Prospects for Veeva Systems
Per a report by Introspective Market Research, the global clinical data management system market is expected to reach $5.42 billion by 2030 from $2.3 billion in 2022 at a CAGR of 11.3%. Factors like the rising number of clinical trials and the integration with other healthcare technologies are expected to drive the market.
Given the market potential, the latest release of features is expected to boost Veeva’s business globally.
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Quest Diagnostics Incorporated (DGX - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%. Its shares have risen 11.4% compared with the industry’s 7.7% growth in the past six months.
Quest Diagnostics, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 6.2%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Quest Diagnostics’ shares have risen 18.6% compared with the industry’s 7.7% growth in the past six months.
Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
Boston Scientific’s shares have rallied 25.6% compared with the industry’s 6.5% growth in the past six months.
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Factors Driving Veeva Stock More Than 20% in Three Months
Shares of Veeva Systems (VEEV - Free Report) have risen 20.5% in the past three months, outperforming both the industry as well as the S&P 500 Index. The outperformance was primarily driven by its strong quarterly results during the second quarter of fiscal 2025, continued expansion of its product offerings and the addition of new partners.
VEEV’s Robust Results
Veeva reported better-than-expected earnings for the second quarter on Aug. 28, leading to a rise in share price. The company’s top line was up 15% compared to the prior-year quarter, primarily driven by a 19% increase in recurring subscriptions. Reported revenues also beat market expectations. The company expects subscription revenues to grow 15% in the third quarter.
Meanwhile, the strong growth in recurring revenues boosts optimism, implying strong revenue growth to continue in the upcoming quarters. The subscription model is helping the company retain customers as well as boost the lifetime value derived from each customer.
Subscription revenues are more reliable due to the auto-renewal option compared to license revenues that are primarily one-time in nature. The rising mix of subscription contributions in total revenues tends to be an important growth catalyst. The company signed more multi-year orders compared to historical trends, implying a steady revenue stream going forward.
Image Source: Zacks Investment Research
The strong top-line growth also helped VEEV in achieving a 32% improvement in its operating profit and nearly $850 million in free cash flow during the first two quarters of fiscal 2025. The company expects its adjusted operating margin to be 40% for fiscal 2025, implying a 440 basis points expansion compared to fiscal 2024.
The company also raised its revenue and earnings guidance on its second-quarter earnings call, buoyed by its sustained robust performance. Veeva now expects revenues for fiscal 2025 to be between $2,704 million and $2,710 million compared with the earlier guidance of $2,700-$2,710 million. The Zacks Consensus Estimate is currently pegged at $2.71 billion.
For fiscal 2025, Subscription revenues are now expected to be $2,257 million, higher than the previous outlook of $2,245 million. This consists of Commercial Solutions’ subscription revenues of around $1,090 million (up from the prior outlook of $1,080 million) and R&D Solutions’ subscription revenues of approximately $1,167 million (higher than the previous outlook of $1,165 million).
Adjusted EPS for fiscal 2025 is now expected to be $6.22, up from the previous guidance of $6.16. The Zacks Consensus Estimate is pegged at $6.21.
VEEV’s New Deals in the Past Three Months
Earlier this month, Veeva added powerful new capabilities and a streamlined site-centric experience to its Veeva Site Connect to simplify and standardize sponsor-site collaboration, thus taking a major step forward for clinical trial execution. The new capabilities and simple, standard site experience will likely reduce trial time and expense.
During the second quarter, Veeva partnered with Vita Global Sciences to provide service offerings. These deals are likely to enable Vita Global to establish a clinical data foundation, accelerate study builds and manage changes with no downtime for faster trials that can improve patient outcomes using Veeva Vault EDC.
Another company, Hangzhou Tigermed Consulting also signed a deal with VEEV to use Veeva Vault EDC as its technology foundation to modernize electronic data capture and simplify complex data management for faster study builds and mid-study amendments with zero downtime.
Industry Prospects for Veeva Systems
Per a report by Introspective Market Research, the global clinical data management system market is expected to reach $5.42 billion by 2030 from $2.3 billion in 2022 at a CAGR of 11.3%. Factors like the rising number of clinical trials and the integration with other healthcare technologies are expected to drive the market.
Given the market potential, the latest release of features is expected to boost Veeva’s business globally.
Veeva Systems Inc. Price
Veeva Systems Inc. price | Veeva Systems Inc. Quote
VEEV’s Zacks Rank and Stocks to Consider
Veeva currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Quest Diagnostics Incorporated (DGX - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 17.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%. Its shares have risen 11.4% compared with the industry’s 7.7% growth in the past six months.
Quest Diagnostics, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 6.2%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Quest Diagnostics’ shares have risen 18.6% compared with the industry’s 7.7% growth in the past six months.
Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
Boston Scientific’s shares have rallied 25.6% compared with the industry’s 6.5% growth in the past six months.