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Veeva Systems (VEEV) Up 13.5% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Veeva Systems Inc. (VEEV - Free Report) . Shares have added about 13.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 drivers.
Veeva Systems (VEEV - Free Report) Q4 Earnings, Revenues Top Estimates
Headquartered in Pleasanton, CA, Veeva Systems Inc. (VEEV - Free Report) reported fourth-quarter 2017 adjusted earnings of $0.15 per share, higher than the year-ago quarter figure of $0.12. The Zacks Consensus Estimate for earnings was $0.11 per share.
Total revenue for the reported quarter were $150.2 million, up from $114.3 million a year ago, an increase of 31% year over year. This also outpaced the Zacks Consensus Estimate of $146.0 million.
Quarter Highlights
Subscription revenues rose 32% year over year to $119.5 million, driven by growth across product lines.
Professional services revenues increased almost 28% to $30.7 million, primarily owing to strong adoption of the Vault platform.
Gross margin at Veeva expanded 400 basis points (bps) to 71.4% in the reported quarter, driven by favorable revenue mix (higher percentage of subscription revenues). The company reported a 100 bps surge in subscription gross margin, totaling almost 80%.
Adjusted operating expenses, as a percentage of revenues, was 38.2% as compared with 41.1% in the year-ago quarter. As a percentage of revenues, selling and marketing (S&M) and general and administrative (G&A) expenses contracted 20 and 330 bps, respectively. However, research and development (R&D) expenses rose 60 bps on a year-over-year basis in the reported quarter.
Balance Sheet
Veeva ended the fourth quarter with nearly $217.6 million in cash and short-term investments. Notably, calculated billings totaled $227 million in the quarter which was ahead of managements guided range, driven by impressive sales performance and strong services revenue.
Guidance
For fiscal 2018, total revenue is anticipated in the band of $655.0–$660.9 million. Adjusted operating income is likely to be between $180.0 million and $185.0 million. Adjusted earnings are forecasted between 78 cents and 80 cents.
For first-quarter 2018 ending Apr 30, 2017, Veeva expects total revenue in the range of $151.0–$152.0 million. Meanwhile, adjusted operating income is expected between $41.5 million and $42.5 million. Adjusted earnings are forecasted at 18 cents per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Veeva Systems' stock has a poor score of 'F' on both growth and momentum front. Charting a similar path, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Veeva Systems (VEEV) Up 13.5% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Veeva Systems Inc. (VEEV - Free Report) . Shares have added about 13.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 drivers.
Veeva Systems (VEEV - Free Report) Q4 Earnings, Revenues Top Estimates
Headquartered in Pleasanton, CA, Veeva Systems Inc. (VEEV - Free Report) reported fourth-quarter 2017 adjusted earnings of $0.15 per share, higher than the year-ago quarter figure of $0.12. The Zacks Consensus Estimate for earnings was $0.11 per share.
Total revenue for the reported quarter were $150.2 million, up from $114.3 million a year ago, an increase of 31% year over year. This also outpaced the Zacks Consensus Estimate of $146.0 million.
Quarter Highlights
Subscription revenues rose 32% year over year to $119.5 million, driven by growth across product lines.
Professional services revenues increased almost 28% to $30.7 million, primarily owing to strong adoption of the Vault platform.
Gross margin at Veeva expanded 400 basis points (bps) to 71.4% in the reported quarter, driven by favorable revenue mix (higher percentage of subscription revenues). The company reported a 100 bps surge in subscription gross margin, totaling almost 80%.
Adjusted operating expenses, as a percentage of revenues, was 38.2% as compared with 41.1% in the year-ago quarter. As a percentage of revenues, selling and marketing (S&M) and general and administrative (G&A) expenses contracted 20 and 330 bps, respectively. However, research and development (R&D) expenses rose 60 bps on a year-over-year basis in the reported quarter.
Balance Sheet
Veeva ended the fourth quarter with nearly $217.6 million in cash and short-term investments. Notably, calculated billings totaled $227 million in the quarter which was ahead of managements guided range, driven by impressive sales performance and strong services revenue.
Guidance
For fiscal 2018, total revenue is anticipated in the band of $655.0–$660.9 million. Adjusted operating income is likely to be between $180.0 million and $185.0 million. Adjusted earnings are forecasted between 78 cents and 80 cents.
For first-quarter 2018 ending Apr 30, 2017, Veeva expects total revenue in the range of $151.0–$152.0 million. Meanwhile, adjusted operating income is expected between $41.5 million and $42.5 million. Adjusted earnings are forecasted at 18 cents per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Veeva Systems Inc. Price and Consensus
Veeva Systems Inc. Price and Consensus | Veeva Systems Inc. Quote
VGM Scores
At this time, Veeva Systems' stock has a poor score of 'F' on both growth and momentum front. Charting a similar path, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.