One-glance verdict
Undervalued
$365.75 our estimate vs market $262.40
Wall Street consensus: $297.30 (-18.7% lower than our fair-value estimate)
28% below our estimate, below the bear case
Fundamentals snapshot
Veeva Systems Inc.
VEEV · NYQ · Healthcare · Health Information Services
Current price
$262.40
52-week range
$148.05 - $310.50
Market cap
$42.48B
Balance sheet
Healthy
3.43x Stretched
Net cash $7.09B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 8.2% last year.
- Reward Returns 14.4% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 4/10 years.
What this company does
Veeva Systems Inc.
Veeva Systems provides specialized cloud software for drug and biotech companies to manage the entire lifecycle of a medicine, from clinical trials to sales and marketing. Because its software is essential for navigating complex industry regulations, customers pay ongoing subscription fees, creating a very stable business built on predictable recurring revenue (income that comes in regularly, like a magazine subscription).
How the company got here
Founded in 2007 by Peter Gassner and Matt Wallach, Veeva Systems set out to create specialized, cloud-based software for the life sciences industry, a sector with complex regulations. The company's first major product was a Customer Relationship Management (CRM) tool designed specifically for pharmaceutical companies to manage their interactions with doctors. A key turning point was the launch of Veeva Vault in 2011, a platform for managing the vast amount of content and data required throughout a drug's development. Veeva became a public company in 2013 and has since grown by expanding its product offerings and acquiring other companies.
What it actually does
Veeva provides highly specialized software, data, and consulting services for the life sciences industry, which includes pharmaceutical, biotechnology, and medical device companies. Think of it as a digital operating system for these businesses, helping them manage everything from clinical trials and regulatory paperwork to sales and marketing. Its products help companies develop medicines faster, ensure they follow strict government rules, and market their products effectively to healthcare professionals. Veeva's tools are 'cloud-based,' meaning they are accessed over the internet, so companies don't need to manage their own complex servers.
Veeva Commercial Cloud
This is the part of Veeva's business focused on helping life sciences companies sell and market their products. Its main offering is Veeva CRM, a tool tailored for pharmaceutical sales representatives to manage their relationships with doctors and hospitals. This segment also includes data and analytics products that help companies understand the market and engage with healthcare professionals across various channels, like email and virtual meetings. Customers pay subscription fees to use this software, which helps them ensure their sales and marketing efforts are effective and compliant with industry regulations. This is a major part of Veeva's business.
Veeva Development Cloud
This segment provides applications that help manage the long and complicated process of developing new drugs and medical devices. It's built around the Veeva Vault platform, which acts as a central hub for managing documents and data for clinical trials, regulatory submissions, and quality control. For example, it helps companies run clinical trials more efficiently, submit new drugs for approval to agencies like the FDA, and manage manufacturing quality. Companies pay subscription fees for these applications to speed up development and ensure they meet strict safety and regulatory standards. This is the other major pillar of Veeva's business, roughly equal in size to the Commercial Cloud.
What management is betting on now
Veeva is heavily focused on expanding its own proprietary platform, particularly its Vault CRM, to which it is migrating customers. The company is also making a big push into artificial intelligence (AI) with its Veeva Falcon platform, which aims to automate and improve various processes for life sciences companies. Management has set a goal to significantly increase its revenue by 2030, driven by the adoption of these newer platforms and continued expansion within the life sciences industry. They are also using their large cash reserves to potentially acquire other companies that can add to their offerings.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$927.96M
Net income
$273.43M
Diluted EPS
1.66
Operating cash flow
$238.71M
Free cash flow
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Revenue
$882.95M
Net income
$260.94M
Diluted EPS
1.57
Operating cash flow
$1.13B
Free cash flow
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Revenue
$835.95M
Net income
$244.20M
Diluted EPS
1.48
Operating cash flow
$106.85M
Free cash flow
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Revenue
$811.24M
Net income
$236.20M
Diluted EPS
1.40
Operating cash flow
$192.79M
Free cash flow
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Revenue
$789.08M
Net income
$200.31M
Diluted EPS
1.19
Operating cash flow
$238.43M
Free cash flow
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Revenue
$759.04M
Net income
$228.19M
Diluted EPS
1.37
Operating cash flow
$877.16M
Free cash flow
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Revenue
$720.89M
Net income
$195.62M
Diluted EPS
1.17
Operating cash flow
$69.54M
Free cash flow
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Revenue
$699.21M
Net income
$185.81M
Diluted EPS
1.13
Operating cash flow
$164.12M
Free cash flow
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Is it cheap or expensive?
Fair value $365.75 vs current price $262.40
Wall Street consensus is the average analyst price target: $297.30 (-18.7% lower than our fair-value estimate).
Our most-likely fair value is $365.75 a share — about 39.4% above today's price of $262.40, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $7.1B - more cash than debt. Interest coverage 3.4x.
Net debt
$-7.09B
Interest coverage
3.43x
Veeva Systems Inc.'s profit covers its interest bill about 3.4 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
VEEV
BASELINE
Veeva Systems Inc.
Total debt $151.70M Interest coverage 3.43x This is the baseline the peer rows are being compared against.
Total debt $16.25B Interest coverage 3.14x -9% vs VEEV Has roughly the same debt cushion as VEEV.
Total debt $167.06M Interest coverage -1.82x -100% vs VEEV This peer has almost no interest-payment cushion compared with VEEV.
Total debt $167.43B Interest coverage 4.88x +42% vs VEEV Carries about 1.4x more debt cushion than VEEV.
Total debt $169.98M Interest coverage -1.76x -100% vs VEEV This peer has almost no interest-payment cushion compared with VEEV.
Total debt $22.06B Interest coverage 6.04x +76% vs VEEV Carries about 1.8x more debt cushion than VEEV.
What you should know
The case for and against VEEV
3 Rewards
0 Risks
Rewards
-
Revenue grew 8.2% last year.
-
Returns 14.4% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
42.95x
Forward P/E
25.60x
P/B
5.85x
P/S
12.29x
EV/EBITDA
32.70x
PEG ratio
1.16x
Profitability
How much profit each dollar creates
Gross margin
75.0%
Operating margin
29.6%
Net margin
29.3%
ROE
14.4%
ROA
7.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.02x
Current ratio
5.46x
Quick ratio
5.36x
Total debt
$151.70M
Total cash
$7.24B
Growth
How the business has been compounding
Revenue TTM
$3.46B
Revenue 5Y CAGR
14.6%
EPS TTM
6.11
EPS 5Y CAGR
21.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.67B
Free CF TTM
$1.42B
FCF margin
40.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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