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MSFT   236.41 (-0.44%)
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S&P 500   3,647.29 (-0.21%)
DOW   29,134.99 (-0.43%)
QQQ   274.48 (+0.04%)
AAPL   151.76 (+0.66%)
MSFT   236.41 (-0.44%)
META   134.40 (-1.44%)
GOOGL   97.50 (-0.68%)
AMZN   114.41 (-0.64%)
TSLA   282.94 (+2.51%)
NVDA   124.13 (+1.51%)
NIO   17.19 (-2.44%)
BABA   77.87 (-1.32%)
AMD   67.17 (+1.31%)
T   15.73 (+0.38%)
MU   50.58 (+3.48%)
CGC   2.86 (+4.38%)
F   11.91 (-0.67%)
GE   64.47 (+0.19%)
DIS   95.85 (-2.31%)
AMC   7.45 (+9.08%)
PYPL   85.75 (+1.77%)
PFE   44.09 (+0.59%)
NFLX   224.36 (+0.13%)
S&P 500   3,647.29 (-0.21%)
DOW   29,134.99 (-0.43%)
QQQ   274.48 (+0.04%)
AAPL   151.76 (+0.66%)
MSFT   236.41 (-0.44%)
META   134.40 (-1.44%)
GOOGL   97.50 (-0.68%)
AMZN   114.41 (-0.64%)
TSLA   282.94 (+2.51%)
NVDA   124.13 (+1.51%)
NIO   17.19 (-2.44%)
BABA   77.87 (-1.32%)
AMD   67.17 (+1.31%)
T   15.73 (+0.38%)
MU   50.58 (+3.48%)
CGC   2.86 (+4.38%)
F   11.91 (-0.67%)
GE   64.47 (+0.19%)
DIS   95.85 (-2.31%)
AMC   7.45 (+9.08%)
PYPL   85.75 (+1.77%)
PFE   44.09 (+0.59%)
NFLX   224.36 (+0.13%)

Veeva Systems (NYSE:VEEV) Stock a Buy: Cloud Software for Life Sciences

Veeva Systems (NYSE:VEEV) Stock a Buy: Cloud Software for Life Sciences

When you start to think about all of the different applications for cloud software in the world, it’s easy to see why investors have been scooping up shares of companies in the sector. Cloud computing helps companies achieve better business efficiencies, more flexibility, cost savings, increased collaboration, and much more. With businesses of all different sizes moving their operations into the cloud thanks to the pandemic, most of the companies that offer cloud-based products and services are benefitting.

What if you could find a company that combines the power of cloud software solutions with one of the most lucrative industries in the world, life sciences? That’s exactly the case with Veeva Systems (NYSE:VEEV), which provides cloud-based software solutions to biotechnology and pharmaceutical companies around the world. The stock could be a smart pick ahead of 2021 and is worth a look for several reasons, let’s take a deeper look at them below.

Unique Solutions for a Niche Market

One of the most attractive things about Veeva Systems stock is that it provides cloud-based software solutions for a niche market. This differentiates Veeva from other cloud software companies and has helped the company to develop a loyal customer base. Veeva offers solutions for a range of different requirements within life sciences companies such as multichannel customer relationship management, customer data, regulated content, master data management, and more.

Time is money when it comes to developing new drugs and treatments for biotech and pharmaceutical companies, which is why Veeva Systems is seeing steady demand for its platform. Its solutions help these companies with developing and bringing new products to market faster, marketing them effectively, and staying in line with government regulations. Some of Veeva’s current customer list of 950 customers includes massive global pharmaceutical and biotech companies like Eli Lilly, AstraZeneca, Merck, and Bayer AG. The bottom line is that Veeva Systems is assisting some of the biggest life sciences companies in the world with streamlining their product life cycles, which makes it one of the more intriguing investment options in the cloud-software space.


Wide Economic Moat

With so many different cloud software companies for investors to choose from these days, it’s important to assess a company’s competitive advantage if you are thinking about adding it to your portfolio for the long-term. With Veeva Systems, you have a company with a wide economic moat for several reasons. First, you have the fact that Veeva Systems has institutional knowledge that has helped it stand out in a fragmented market. Veeva’s solutions help life sciences companies to improve their efficiency, but most importantly, they can work smarter while adhering to all of the privacy rules and global regulations that are common in the industry. Veeva even provides guidelines that allow for more rapid drug commercialization.

There’s also the fact that it is quite expensive for life science companies to switch to another cloud-software solution after they have already implemented Veeva. Switching costs can add up thanks to the time and expenses associated with implementing new software, while productivity losses and steep learning curves also can cost companies dearly if they try to move on from Veeva. The worst-case scenario, if a company does decide to switch from Veeva to a new solution, is the risk of losing critical data or dealing with large-scale operational disruptions. All of this means that customers are likely to stick with Veeva Systems for the long-term, especially since Veeva is focused on a market with limited competition.

Earnings Growth Even Before the Pandemic

Veeva Systems was seeing strong earnings growth even before the pandemic, as the company saw its Fiscal Year 2020 total revenue grow by 28% year-over-year to $1.1 billion. The pandemic has only accelerated that top-line growth as more companies move to cloud-based solutions that help streamline their operations. While the stock sold off a bit after Veeva’s Q3 results in early December, the share price has since recovered which tells us that the selloff was likely an overreaction to management’s conservative forward estimates.

In Q3 the company added a record 19 new customers for its customer relationship management offering and saw total revenue of $377.5 million, up 34% year-over-year. Veeva also beat the consensus analyst estimates for revenue and EPS in Q3. Veeva’s strong reputation within the life sciences industry and the fact that many companies are investing in technology that will improve their efficiencies should help the company continue to deliver strong earnings for shareholders in 2021 and beyond.

Final Thoughts

Veeva Systems stock has been a very strong performer in 2020, but there are plenty of good reasons to think that the stock can continue its momentum into 2021. Thanks to the company’s competitive advantages, strong earnings growth, and niche market in the cloud software space, it’s a stock that is worth considering for your portfolio at this time.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Veeva Systems (VEEV)
2.8995 of 5 stars
$161.23+2.1%N/A66.35Moderate Buy$223.05
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Should you invest $1,000 in Veeva Systems right now?

Before you consider Veeva Systems, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Veeva Systems wasn't on the list.

While Veeva Systems currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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