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Veeva Systems (VEEV) Up 3.4% 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 3.4% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Veeva Systems Beats Q1 Earnings, Revenue Estimates
Headquartered in Pleasanton, CA, Systems Inc. reported first-quarter fiscal 2018, adjusted earnings of $0.14 per share, ending Apr 30, 2017. The company’s earnings beat the Zacks Consensus Estimate of $0.12 and the year-ago figure of $0.11.
Total revenues in the reported quarter were $157.9 million, up from $119.8 million in the year-ago quarter, projecting an increase of 32% year over year. This was well ahead of the Zacks Consensus Estimate of $152.0 million.
Quarter Highlights
Subscription services revenues were $127.3 million, up from $96.0 million in the year-ago quarter, increasing by 33% year-over-year.
Professional services revenues increased almost 29% to $30.6 million, primarily owing to strong adoption of the Vault platform.
In the first quarter, the company witnessed a number of registrations in the Veeva Commercial Cloud platform around the world. Veeva Systems has many core CRM projects on track with large pharma companies around the globe.
In the reported quarter, Veeva Systems made significant progress across various fields and geographies, courtesy of products like Veeva Network, Veeva Align, Veeva OpenData, and Veeva CRM Approved Email.
Coming to the Vault platform, the company’s bookings accounted for more than half of the total bookings in the quarter. In the cloud platform, Veeva Systems gained significant market traction with Zinc Ahead.
The adoption of Vault QualityDocs and Vault QMS is also on the rise. Veeva Systems gained considerable traction in the market with eight of the top 20 pharmaceuticals companies being standardized on the Vault eTMF platform. Veeva Systems announced its entry into the clinical data management space with two new solutions – Veeva Vault EDC and Veeva Vault eSource.
Margin Details
Gross margin at Veeva Systems expanded 300 basis points (bps) to 71.0% in the reported quarter, owing to favorable revenue mix (higher percentage of subscription revenues). The company reported a surge of 200 bps in subscription gross margin, totaling almost 81%.
Balance Sheet
Veeva Systems ended the reported quarter with nearly $663.9 million in cash and short-term investments versus $519.0 million at the end of the sequential quarter. Calculated billings totaled $182 million in the quarter which was ahead of management’s guidance of $175 million, courtesy of impressive sales performance and strong services revenue.
Guidance
For fiscal 2018, ending Jan 31, 2018, total revenues are anticipated in the band of $665.0 and $669.0 million. Adjusted operating income is likely to be between $191.0 million and $195.0 million. Adjusted earnings are forecasted between $0.82 and $0.84.
For second-quarter fiscal 2017 ending on Jul 31, 2017, Veeva Systems expects total revenues in the range of $163.0–$164.0 million. Meanwhile, adjusted operating income is expected between $46.0 million and $47.0 million. Adjusted earnings are forecasted at around $0.20 per share.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been four revisions higher for the current quarter In the past month, the consensus estimate has shifted by 22.2% due to these changes.
At this time, Veeva Systems' stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Veeva Systems (VEEV) Up 3.4% 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 3.4% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Veeva Systems Beats Q1 Earnings, Revenue Estimates
Headquartered in Pleasanton, CA, Systems Inc. reported first-quarter fiscal 2018, adjusted earnings of $0.14 per share, ending Apr 30, 2017. The company’s earnings beat the Zacks Consensus Estimate of $0.12 and the year-ago figure of $0.11.
Total revenues in the reported quarter were $157.9 million, up from $119.8 million in the year-ago quarter, projecting an increase of 32% year over year. This was well ahead of the Zacks Consensus Estimate of $152.0 million.
Quarter Highlights
Subscription services revenues were $127.3 million, up from $96.0 million in the year-ago quarter, increasing by 33% year-over-year.
Professional services revenues increased almost 29% to $30.6 million, primarily owing to strong adoption of the Vault platform.
In the first quarter, the company witnessed a number of registrations in the Veeva Commercial Cloud platform around the world. Veeva Systems has many core CRM projects on track with large pharma companies around the globe.
In the reported quarter, Veeva Systems made significant progress across various fields and geographies, courtesy of products like Veeva Network, Veeva Align, Veeva OpenData, and Veeva CRM Approved Email.
Coming to the Vault platform, the company’s bookings accounted for more than half of the total bookings in the quarter. In the cloud platform, Veeva Systems gained significant market traction with Zinc Ahead.
The adoption of Vault QualityDocs and Vault QMS is also on the rise. Veeva Systems gained considerable traction in the market with eight of the top 20 pharmaceuticals companies being standardized on the Vault eTMF platform. Veeva Systems announced its entry into the clinical data management space with two new solutions – Veeva Vault EDC and Veeva Vault eSource.
Margin Details
Gross margin at Veeva Systems expanded 300 basis points (bps) to 71.0% in the reported quarter, owing to favorable revenue mix (higher percentage of subscription revenues). The company reported a surge of 200 bps in subscription gross margin, totaling almost 81%.
Balance Sheet
Veeva Systems ended the reported quarter with nearly $663.9 million in cash and short-term investments versus $519.0 million at the end of the sequential quarter. Calculated billings totaled $182 million in the quarter which was ahead of management’s guidance of $175 million, courtesy of impressive sales performance and strong services revenue.
Guidance
For fiscal 2018, ending Jan 31, 2018, total revenues are anticipated in the band of $665.0 and $669.0 million. Adjusted operating income is likely to be between $191.0 million and $195.0 million. Adjusted earnings are forecasted between $0.82 and $0.84.
For second-quarter fiscal 2017 ending on Jul 31, 2017, Veeva Systems expects total revenues in the range of $163.0–$164.0 million. Meanwhile, adjusted operating income is expected between $46.0 million and $47.0 million. Adjusted earnings are forecasted at around $0.20 per share.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been four revisions higher for the current quarter In the past month, the consensus estimate has shifted by 22.2% due to these changes.
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 great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.