“Long live cloud-Based technology" tech has been the clear winner during the COVID-19 pandemic, and this most popular sector might just continue to surpass our expectations.
Veeva Systems Inc. (VEEV) provides cloud-based software to some of the largest pharmaceutical companies and life sciences industries and has outpaced its competition.
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Fundamentals
The company operates in two primary segments, namely Veeva Vault and Veeva Commercial Cloud, which contributes approximately the same revenue. The company's latest second-quarter earnings released in August surpassed investor expectations.
Revenue beat expectations by $13.68 million, a 32.5% year-over-year increase as earnings per share also outperformed the market consensus by $0.08. Revenues from both subscription and professional services beat estimates with operating income up 39%.
Veeva Systems Inc (VEEV) share overview:
- Sector: Healthcare.
- Market Cap of $44.36 billion.
- Dividend Yield: N/A
- Price/Earnings (LTM): 142.7x
- Price/Book: 22.7x
- Next Earnings: 24th of November 2020.
- 52 Week Range low of $120.93 and $297.07 per share high.
The Q3, Veeva Systems forecast sees revenue between $360-362 million while analysts expect revenue at $347 million. The company’s earnings per share (EPS) outlook is between $0.66-0.68 for the third quarter as the market consensus is $0.64 per share.
Outlook – Veeva Systems has also raised its full-year outlook, which has investors excited, but the stock might even outshine its competition if another COVID-19 market correction is on the cards.
Veeva Systems is a resilient business which has seen constant revenue growth which tends to strengthen even more during weak economic cycles. Case in point, the coronavirus pandemic saw a sell-off of prominent stock names while smaller companies, like Veeva, adapted and flourished.
Chart Life
Veeva Systems Inc (VEEV) has been in a steady uptrend, giving “buy the dip” buyers much satisfaction since the base breakout in April 2020. The price action is forming another base which might deliver another breakout opportunity above $297 per share. The 50-day simple moving average of the price (blue line) is acting as support and will be watched closely if the base formation is rejected.
Short interest on outstanding shares on Veeva Systems Inc (VEEV) is only 1.2% supporting a positive outlook, while the median analyst expectations are $302.38 per share (red line).
Portfolio particulars
- Portfolio Hold (Current)*
- Portfolio Buy opportunity: above$300.00 per share**
- WhatsTheBeef long term target price: $325.00 per share.
Click to view Veeva Systems Inc (VEEV) shares
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Informed decisions
Veeva Systems Inc might be one of those rare win-win but not unheard-of investment opportunities over the long term. The stock has shown resilience and excelled in the face of a global pandemic which makes it attractive if a "second wave” hits the U.S shores. The stock's Fundamental and Technical Analysis outlooks are also starting to align, which also supports a move to the upside.
New to investing
and want to know more about Healthcare stocks?
Read: New Vaccine Stocks Land on Easy and Moderna (MRNA) vaccine to the rescue.
Sources – EasyResearch, Veeva Systems Inc, Koyfin, SeekingAlpha, The Motley Fool, Wikipedia.
Take note: stock data was taken on 12/10/2020 before the U.S market open.
*Portfolio Hold (Current) refers to investors who already hold the stock within their portfolio before the U.S. market open.
**Portfolio Buy opportunity refers to Technical level crossed which might imply that the markets behavior would support the outlook and Close above refers to a share price close above a Technical Resistance level.
Follow Barry Dumas
@BEEF_FINMARKETS
Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
