What Our Analysts Know About Veeva Systems

Veeva Systems shares moved -5.2% over the last 52 weeks, with a high of $232.26 and a low of $151.02. During this time, the stock outperformed the S&P 500 index by 2.0%. As of January 2022, the company's 50-day average price is $174.0. Veeva Systems Inc. provides cloud-based software for the life sciences industry. The large-cap Health Care company has 6,744 full time employees and is based in Pleasanton, CA. Veeva Systems has not offered any dividends in the last year.

Good EPS Growth with Low Leverage Levels:

2020-01-31 2021-01-31 2022-01-31 2023-01-31
Revenue (MM) $1,104 $1,465 $1,851 $2,155
Revenue Growth n/a 32.7% 26.33% 16.44%
Gross Margins 72.5% 72.1% 72.8% 71.7%
Gross Margins Growth n/a -0.55% 0.97% -1.51%
Operating Margins 25.9% 25.8% 27.3% 21.3%
Operating Margins Growth n/a -0.39% 5.81% -21.98%
Net Margins 27.27% 25.94% 23.09% 22.63%
Net Margins Growth n/a -4.88% -10.99% -1.99%
Earnings Per Share $1.9 $2.36 $2.63 $3.01
EPS Growth n/a 24.21% 11.44% 14.45%
Diluted Shares (MM) 158 161 162 144
Free Cash Flow (MM) $433 $551 $764 $780
FCF Growth n/a 27.29% 38.68% 2.09%
Capital Expenditures (MM) -$4 n/a n/a n/a
Net Debt / EBITDA -1.34 -1.64 -2.03 -1.69

Veeva Systems Is Fairly Priced at Current Levels:

Compared to the Health Care sector's average of 24.45, Veeva Systems has a trailing twelve month P/E ratio of 60.8 and, according to its EPS guidance of 5.22, an expected P/E ratio of 35.1. Veeva Systems's PEG ratio is 2.02 based on its 28.7% compound average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.

Veeva Systems's P/B ratio is 7.8 compared to its sector average of 4.16. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 406.8% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 2.47 * 23.484) = $36.13

Veeva Systems's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.

Veeva Systems Is the Subject of Mixed Market Indicators:

25 analysts are following Veeva Systems and have set target prices ranging from $170.0 to $243.0 per share. On average, they have given the company a rating of buy. At the current price of $183.1, VEEV is trading -12.29% away from its average analyst target price of $208.76 per share, implying an analyst consensus of some upside potential for the stock.

The company has a very low short interest since 1.8% of the company's shares are tied to short positions. Institutions own 92.5% of Veeva Systems's shares, while the insider ownership rate stands at 0.71%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $2,478,366,794.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.