Veeva Tops Q1 Expectations; Shares Jump 10%

Veeva Systems Inc., (VEEV) a cloud-based software developer for the life sciences industry reported blowout fiscal Q1 results and beat expectations backed by the addition of 59 new customers, taking the total count to more than 1000 customers. Shares jumped 10.1% to close at $291.34 on May 28.

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In the first quarter, adjusted earnings grew 37.9% year-over-year to $0.91 per share and beat the Street’s estimates of $0.78 per share.

Revenue came in at $433.57 million, up 29% year-over-year and surpassed analysts’ expectations of $410.03 million.

Subscription services revenue climbed 26% from the prior-year period to $341.12 million. (See Veeva Systems stock analysis on TipRanks)

The company’s CEO Peter Gassner said, “The team’s focus on customer success and product excellence continues to drive Veeva’s outstanding results. Our innovations in data, software, and services are helping the industry move to a new digital-first model.”

For fiscal Q2, the company projects revenue and adjusted earnings in the range of $450 million to $452 million and $0.85 – $0.86 per share, respectively. Consensus estimates for revenue and earnings are pegged at $427.46 million and $0.80 per share, respectively.

For the Fiscal Year 2022, the company forecasts revenue to be in the range of $1.815 billion – $1.825 billion and adjusted earnings to be $3.49 per share. The Street’s estimates for revenue and earnings are pegged at $1.76 billion and $3.24 per share, respectively.

Following the results, Guggenheim analyst Kenneth Wong lifted the price target to $350 (from $340) implying 20.1% upside potential to current levels.

Wong maintained a Buy rating on the stock and said, “We view the consistency of Veeva’s quarterly execution to be every bit as, if not more, impressive than the magnitude of recent outperformance. VEEV delivered another robust print with F1Q22 billings, revenue, and margins all well ahead of elevated investor expectations…Billings outlook is back above the 20% growth threshold, giving us confidence that the recent momentum is sustainable.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 13 Buys and 5 Holds. The average analyst price target of $331.22 implies 13.7% upside potential to current levels. Shares have gained 33% over the past year.

Veeva System scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.