Veeva Systems Shares Surge 14% After Q1 Earnings Beat; Target Price $329

Veeva Systems shares surged as much as 14% on Friday, a day after the cloud-computing company reported better-than-expected earnings in the first quarter and lifted its annual revenue outlook to $1,815 million-$1,825 million.

The cloud-computing company said its total revenue rose 29% year over year to $433.6 million. That beat the Wall Street consensus estimates of around $410.1 billion. Subscription services revenues for the first quarter were $341.1 million, up from $270.2 million one year ago, an increase of 26% year over year.

For the quarter ended April 30, 2021, fully diluted net income per share was $0.71, compared to $0.54 one year ago, while non-GAAP fully diluted net income per share was $0.91, compared to $0.66 one year ago. That was higher than the market expectations of $0.78.

Veeva Systems shares rose as much as 14% to $302 on Friday, a day after the quarterly earnings report. The stock rose over 8% so far this year.

Analyst Comments

“Veeva delivered in typical fashion a healthy beat, starting off FY22 on strong footing. With strength across both Commercial Cloud and Vault, and revenue flowing through to drive margins and FCF, elegance of the model is undeniable. As our estimates move up, we remain Overweight and increase price target to $350,” noted Stan Zlotsky, equity analyst at Morgan Stanley.

“Veeva’s core products provide SaaS solutions for the Life Sciences industry, targeting $10B+ of spend today with potential overtime to address more of the $44B Life Sciences spend on IT, leveraging the company’s strong brand recognition and expanding its TAM into other regulated industries and use cases. As Veeva penetrates this large TAM, we see a sustainable 17% revenue CAGR over the next 5 years. Our Price Target is based on 2.4x EV/CY25 FCF/Growth adjusted, a premium to large-cap peers, but justified given the long term FCF durability and large market opportunity.”

Veeva Systems Stock Price Forecast

Seventeen analysts who offered stock ratings for Veeva Systems in the last three months forecast the average price in 12 months of $329.82 with a high forecast of $360.00 and a low forecast of $270.00.

The average price target represents an 11.80% increase from the last price of $295.00. Of those 17 analysts, 12 rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast of $350 from $340 with a high of $558 under a bull scenario and $204 under the worst-case scenario. The firm gave an “Overweight” rating on the cloud-computing company’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to $270 from $250. Stifel lifted the target price to $345 from $325. Cowen and company increased the target price to $70 from $65. Citigroup raised the price target to $340 from $335. Piper Sandler lifted the target price to $360 from $350. JPMorgan slashed the target price to $309 from $313.

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