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Can Segmental Growth Boost Veeva Systems' (VEEV) Q2 Earnings?
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Veeva Systems Inc.’s (VEEV - Free Report) second-quarter fiscal 2019 earnings are scheduled to release on Aug 23, after market close.
Growing demand for cloud-based and vault applications, new product launches, industry-focused approach along with international expansion are expected to drive the top line. While the results are likely to reflect growth in the core Subscription Services segment, other initiatives are also expected to boost earnings.
Earnings Surprise History
Notably, Veeva Systems pulled off a positive average earnings surprise of 12% in the trailing four quarters. In the last reported quarter, the company reported adjusted earnings of 33 cents per share, which beat the Zacks Consensus Estimate by 3 cents and improved 43.5% from the year-ago quarter’s level. Total revenues were $195.5 million in the first quarter, up 22.4% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $189.2 million.
Which Way are the Estimates Treading?
For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $203.7 million, reflecting year-over-year growth of 22.6%. The same for earnings is pinned at 34 cents, showing year-over-year growth of 47.8%.
The Subscription services segment is a significant contributor of Veeva Systems’ revenues, accounting for 79.8% of net revenues in the last reported quarter.
Recently, the company fortified the recurring part of its revenue mix with significant growth in subscription revenues. Moreover, launches of the Veeva Vault and the Veeva Commercial Cloud platforms are encouraging. The company thrives on considerable strength in its CRM platform. The company expects subscription revenues to be roughly $680 million for 2018. Commercial cloud subscription revenue growth is expected to be around 10% and Vault subscription revenue growth is expected to be above 40% on a year-over-year basis. In fact, the flagship Vault platform is expected to drive Subscription revenues.
For the quarter to be reported, the Zacks Consensus Estimate for Subscription services revenues is pegged at $165 million, reflecting growth of 23.1% year over year.
Other Factors at Play
View Upbeat
For the quarter to be reported, Veeva Systems expects total revenues in the range of $203-$204 million. Adjusted operating income is expected in the range of $64-$65 million. Adjusted earnings are expected in the range of 33-34 cents.
Veeva Systems provided fiscal 2019 outlook, where total revenues are anticipated in the band of $826-$830 million, up from the previous range of $815-$820 million. The Zacks Consensus Estimate for fiscal 2019 revenues is pegged at $829.4 million, which falls within the guidance.
Adjusted earnings are projected between $1.36 and $1.38, up from the previous range of $1.30-$1.33. Meanwhile, The Zacks Consensus Estimate for fiscal 2019 earnings is projected at $1.37, which also falls within the given range.
Professional Services Drive Growth
Professional Services unit is also likely to drive the quarterly results. In the last reported quarter, professional service revenues (17.4% of net revenues) rose almost 29.1% to $34 million.
Veeva Systems’ commercial excellence through integrated master data, compliant commercial content, multichannel CRM and collaboration between sponsors, CROs and sites provides it a competitive edge in the MedTech space. We believe that the company will continue to gain from heavy demand within Vault platform's R&D initiatives.
For the quarter to be reported, the Zacks Consensus Estimate for Professional services revenues is pegged at $38.5 million, reflecting an improvement of 19.3% year over year. In fact, professional services have been growing in the mid-to-high teens for the last three years. In the coming quarters, management expects mid-to-high single-digits growth in the segment.
Streak of Favorable developments
In July, Veeva Systems announced that Idorsia, a Swiss biopharmaceutical start-up focused on research, will be implementing the Veeva Development Cloud. The aim is to establish a unified development landscape to facilitate product innovation. The move further consolidates Veeva System’s foothold with respect to providing cloud-based software services in Europe.
Idorsia plans to use multiple flagship applications across Veeva Development Cloud suites. These include Vault eTMF, Vault CTMS, Vault RIM Suite and Vault Quality Suite (read more: Veeva Systems' Development Cloud Platform Picked by Idorsia).
The company also announced that Samsung BioLogics selected Veeva Vault QualityDocs is part of Veeva Vault Quality Suite. The development fortified Veeva Systems’ foothold in South Korea.
Despite the positive factors, foreign exchange headwinds, high operational expenses and intense competition are the primary concerns for Veeva Systems at the moment.
What Does our Model Predict?
Our quantitative model does not show a beat for Veeva Systems this earnings season. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates.
Earnings ESP:The Earnings ESP for Veeva Systems is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:Veeva Systems carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Dollar Tree, Inc (DLTR - Free Report) has an Earnings ESP of +1.54% and a Zacks Rank #2.
Ross Stores, Inc (ROST - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Can Segmental Growth Boost Veeva Systems' (VEEV) Q2 Earnings?
Veeva Systems Inc.’s (VEEV - Free Report) second-quarter fiscal 2019 earnings are scheduled to release on Aug 23, after market close.
Growing demand for cloud-based and vault applications, new product launches, industry-focused approach along with international expansion are expected to drive the top line. While the results are likely to reflect growth in the core Subscription Services segment, other initiatives are also expected to boost earnings.
Earnings Surprise History
Notably, Veeva Systems pulled off a positive average earnings surprise of 12% in the trailing four quarters. In the last reported quarter, the company reported adjusted earnings of 33 cents per share, which beat the Zacks Consensus Estimate by 3 cents and improved 43.5% from the year-ago quarter’s level. Total revenues were $195.5 million in the first quarter, up 22.4% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $189.2 million.
Which Way are the Estimates Treading?
For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $203.7 million, reflecting year-over-year growth of 22.6%. The same for earnings is pinned at 34 cents, showing year-over-year growth of 47.8%.
Veeva Systems Inc. Price and EPS Surprise
Subscription Services to Drive Growth
The Subscription services segment is a significant contributor of Veeva Systems’ revenues, accounting for 79.8% of net revenues in the last reported quarter.
Recently, the company fortified the recurring part of its revenue mix with significant growth in subscription revenues. Moreover, launches of the Veeva Vault and the Veeva Commercial Cloud platforms are encouraging. The company thrives on considerable strength in its CRM platform. The company expects subscription revenues to be roughly $680 million for 2018. Commercial cloud subscription revenue growth is expected to be around 10% and Vault subscription revenue growth is expected to be above 40% on a year-over-year basis. In fact, the flagship Vault platform is expected to drive Subscription revenues.
For the quarter to be reported, the Zacks Consensus Estimate for Subscription services revenues is pegged at $165 million, reflecting growth of 23.1% year over year.
Other Factors at Play
View Upbeat
For the quarter to be reported, Veeva Systems expects total revenues in the range of $203-$204 million. Adjusted operating income is expected in the range of $64-$65 million. Adjusted earnings are expected in the range of 33-34 cents.
Veeva Systems provided fiscal 2019 outlook, where total revenues are anticipated in the band of $826-$830 million, up from the previous range of $815-$820 million. The Zacks Consensus Estimate for fiscal 2019 revenues is pegged at $829.4 million, which falls within the guidance.
Adjusted earnings are projected between $1.36 and $1.38, up from the previous range of $1.30-$1.33. Meanwhile, The Zacks Consensus Estimate for fiscal 2019 earnings is projected at $1.37, which also falls within the given range.
Professional Services Drive Growth
Professional Services unit is also likely to drive the quarterly results. In the last reported quarter, professional service revenues (17.4% of net revenues) rose almost 29.1% to $34 million.
Veeva Systems’ commercial excellence through integrated master data, compliant commercial content, multichannel CRM and collaboration between sponsors, CROs and sites provides it a competitive edge in the MedTech space. We believe that the company will continue to gain from heavy demand within Vault platform's R&D initiatives.
For the quarter to be reported, the Zacks Consensus Estimate for Professional services revenues is pegged at $38.5 million, reflecting an improvement of 19.3% year over year. In fact, professional services have been growing in the mid-to-high teens for the last three years. In the coming quarters, management expects mid-to-high single-digits growth in the segment.
Streak of Favorable developments
In July, Veeva Systems announced that Idorsia, a Swiss biopharmaceutical start-up focused on research, will be implementing the Veeva Development Cloud. The aim is to establish a unified development landscape to facilitate product innovation. The move further consolidates Veeva System’s foothold with respect to providing cloud-based software services in Europe.
Idorsia plans to use multiple flagship applications across Veeva Development Cloud suites. These include Vault eTMF, Vault CTMS, Vault RIM Suite and Vault Quality Suite (read more: Veeva Systems' Development Cloud Platform Picked by Idorsia).
The company also announced that Samsung BioLogics selected Veeva Vault QualityDocs is part of Veeva Vault Quality Suite. The development fortified Veeva Systems’ foothold in South Korea.
Despite the positive factors, foreign exchange headwinds, high operational expenses and intense competition are the primary concerns for Veeva Systems at the moment.
What Does our Model Predict?
Our quantitative model does not show a beat for Veeva Systems this earnings season. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates.
Earnings ESP:The Earnings ESP for Veeva Systems is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:Veeva Systems carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Burlington Stores, Inc. (BURL - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar Tree, Inc (DLTR - Free Report) has an Earnings ESP of +1.54% and a Zacks Rank #2.
Ross Stores, Inc (ROST - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>