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Veeva Systems (VEEV) to Post Q2 Earnings: What's in Store?

Veeva Systems Inc. VEEV is scheduled to release second-quarter fiscal 2021 results on Aug 28, after the closing bell.

In the last reported quarter, the company delivered an earnings surprise of 13.79%. Further, its beat estimates in each of the trailing four quarters, the average surprise being 10.3%.

Q2 Estimates

The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings is pegged at 64 cents, suggesting an improvement of 16.4% from the year-ago quarter. The same for revenues stands at $339.7 million, indicating growth of 27.3% from the prior-year reported figure.

Factors to Note

Veeva Systems unique product portfolio, comprising Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData, might have driven the fiscal second-quarter performance.

Veeva Systems’ first cloud-based content management system, built specifically for life sciences — Veeva Vault — is likely to have added new Vault customers in the fiscal second quarter.

Veeva Systems Inc. Price and EPS Surprise

Veeva Systems Inc. Price and EPS Surprise

Veeva Systems Inc. price-eps-surprise | Veeva Systems Inc. Quote

Strength across each Vault application area, including continued momentum in more established products and early success for new products, may have benefited the to-be-reported quarter’s performance.

Further, Veeva Commercial Cloud and Veeva Vault are likely to have contributed to Professional Service and Other segment’s revenues in the to-be-reported quarter. Additionally, Veeva Systems’ subscription revenues might have benefited from increase in bookings in the fiscal second quarter.

Strong performance across Veeva Systems’ segments — Subscription Service and Professional Service and Others — is likely to get reflected in the to-be-reported quarter’s revenues. Notably, the company expects revenues between $339 million and $341 million in second-quarter fiscal 2021.

In March, Veeva Systems announced that Veeva Data Cloud will provide support to the industry by bringing greater innovation and choice to the data market. Furthermore, the company signed a multi-product deal with a top 20 pharma in Europe for Vault in the clinical and regulatory areas.

Further, in May 2020, the company announced MyVeeva for clinical trials. Notably, it is a software designed to enable clinical research sites to interact more remotely with their patients when required so that they can have a mix of in-office and virtual visits.

Management anticipates significant contribution from the Crossix and Physicians World buyouts in fiscal 2021 with the estimate between $90 million and $95 million.

These positive developments are likely to have impacted the fiscal second-quarter performance.

However, escalating expenses on the operational side might have weighed on Veeva Systems’ margins.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.

Earnings ESP: Veeva Systems has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: It carries a Zacks Rank #3.

Key Picks

Some better-ranked stocks in the broader medical space that have already announced their quarterly results include Thermo Fisher Scientific Inc. TMO, PerkinElmer, Inc. PKI and West Pharmaceutical Services, Inc. WST. While PerkinElmer sports a Zacks Rank of 1, both Thermo Fisher and West Pharmaceuticals carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, which surpassed the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion surpassed the consensus mark by 0.1%.

West Pharmaceuticals reported second-quarter 2020 adjusted EPS of $1.25, outpacing the Zacks Consensus Estimate of 91 cents. Revenues of $527.2 million surpassed the consensus mark by 6.9%.

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