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Veeva Systems (VEEV) Gains But Lags Market: What You Should Know

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Veeva Systems (VEEV - Free Report) closed the most recent trading day at $94.78, moving +0.73% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.97%. At the same time, the Dow added 1.09%, and the tech-heavy Nasdaq gained 1.08%.

Heading into today, shares of the provider of cloud-based software services for the life sciences industry had gained 4.5% over the past month, outpacing the Computer and Technology sector's loss of 2.56% and the S&P 500's loss of 3.04% in that time.

VEEV will be looking to display strength as it nears its next earnings release, which is expected to be February 26, 2019. On that day, VEEV is projected to report earnings of $0.40 per share, which would represent year-over-year growth of 73.91%. Meanwhile, our latest consensus estimate is calling for revenue of $227.54 million, up 23.05% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.58 per share and revenue of $857.28 million, which would represent changes of +69.89% and +25.05%, respectively, from the prior year.

Any recent changes to analyst estimates for VEEV should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. VEEV currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, VEEV currently has a Forward P/E ratio of 59.55. Its industry sports an average Forward P/E of 46.14, so we one might conclude that VEEV is trading at a premium comparatively.

Also, we should mention that VEEV has a PEG ratio of 3.06. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.69 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 48, putting it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow VEEV in the coming trading sessions, be sure to utilize Zacks.com.




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