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Can Veeva Systems (VEEV) Pull a Surprise in Q3 Earnings?

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Veeva Systems Inc. (VEEV - Free Report) is set to report third-quarter fiscal 2017 results on Nov 22. Last quarter, the company reported earnings of 9 cents, which beat the Zacks Consensus Estimate of 8 cents. Notably, the company posted an average positive surprise of 30.27% over the last four quarters.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Veeva expects total revenue in the range of $134.5–$136.0 million for third-quarter fiscal 2017. Meanwhile, non-GAAP operating income is expected between $36.5 million and $37.5 million. Non-GAAP earnings are projected in the band of 15 cents to 16 cents per share. For the third quarter, management anticipates calculated billings of roughly $100 million which represents about 14% growth on a year-over-year basis.

Extended use of multi-channel Customer Relationship Management (CRM) application by customers continues to be a key growth catalyst for the company. We believe product suites like Veeva Vault will help Veeva win customers. The Veeva Vault QMS spreads the product’s presence into 10 new markets. The addition of QMS doubles the company’s growth opportunities in the quality management market.

Additionally, Veeva’s regulatory application suite – Veeva Vault Registrations and Veeva Vault Submissions Archive – continues to gain solid traction, which is a key catalyst. It will be interesting to see if these positives translate into an earnings beat this time around.

VEEVA SYSTEMS-A Price and EPS Surprise



Earnings Whispers

Our proven model does not conclusively show that Veeva is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Veeva has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 10 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Veeva carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat:

Advanced Accelerator Applications S.A. has an Earnings ESP of +55.56% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Adamas Pharmaceuticals, Inc. (ADMS - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #2.

Amarin Corporation plc (AMRN - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #2.

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