Veeva Systems Analysts Confident In Cloud Company's Trajectory After Q2 Beat

The pharma- and life sciences-focused cloud computing company Veeva Systems Inc VEEV reported solid quarterly results Thursday, sending its shares higher. 

The Veeva Systems Analysts: BofA Securities analyst Brad Sills reiterated a Buy rating on Veeva Systems and upped the price target from $230 to $302.

Piper Sandler analyst Brent Bracelin has an Overweight rating and increased the price target from $220 to $310. 

Needham analyst Scott Berg maintained a Buy rating and increased the price target from $235 to $310.

Raymond James analyst Brian Peterson reiterated an Outperform rating and hiked the price target from $230 to $285.

BofA Confident In Veeva Systems' Revenue Growth: Veeva's key second-quarter metrics such as revenues, in both subscriptions and services, and billings beat estimates, and the company raised its fiscal year 2021 guidance, Sills said in a note.

The billings upside stemmed primarily from broad strength across both Commercial and Vault, thanks in part due to some business pulled in from the third quarter and contract duration, the analyst said.

The 10%-plus subscriber growth in commercial points to a growing value proposition in the life sciences CRM offering to manage pandemic-related sales force displacement, he said. 

"Broad Vault strength across the major clinical, regulatory and quality categories underscores the value of an end to end workflow automation offering spanning the entire drug lifecycle." 

Sills expressed confidence in the ability of the company to sustain 20-25% growth long term, with a best-in-class 35%-plus operating margin.

See also: Veeva Systems' CRM Product Is Seeing Ten Times More Usage During Coronavirus Pandemic
Veeva Analyst Expects Sustainable Share Gains, Durable Growth: The upwardly revised price target reflects Piper Sandler's increased confidence in the three-to-five-year opportunity for sustainable share gains and durable growth as the company modernizes the life sciences industry through cloud software, automation and data, Bracelin said.

Needham Says Veeva Can Maintain Organic Subscription Growth: Veeva's strong sales execution and the significant billings beat suggest demand from its predominately pharma customer base has not waned during the COVID-19 pandemic, Berg said in a note. 

The key takeaway from the second-quarter results was the sales momentum, specifically from new solutions like Quality Management and CTMS, the analyst said.

"The additional sales traction and commentary with newer models along with improving usage of Crossix and Physicians World suggest the company has a strong chance to maintain its 20% organic subscription revenue growth through at least FY22." 

Long-Term Trajectory For Shares Higher, Raymond James Says: New business highlights that included record Quality bookings, increased momentum in Clinical and another large add in OLS, which should give investors confidence in the duration of Veeva's growth trajectory, Peterson said in a note. 

The analyst expressed confidence in the company reaching its $3-billion revenue target by calendar year 2025.

While the valuation of the shares remains inexpensive, the long-term trajectory is higher, according to RayJay. 

VEEV Price Action: At last check, Veeva Systems shares were trading 3.58% higher at $279.90.

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