Veeva (VEEV) Up 6.5% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Veeva Systems (VEEV). Shares have added about 6.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Veeva due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Veeva Systems Q4 Earnings Beat Estimates, Margins Pressed

Veeva Systems reported fourth-quarter fiscal 2020 EPS of 54 cents, beating the Zacks Consensus Estimate of 52 cents. The metric shot up 20% on a year-over-year basis.

The company’s revenues totaled $311.5 million, outpacing the Zacks Consensus Estimate of $298.1 million. On a year-over-year basis, the top line improved 34.1%.

Segmental Details

Subscription Service

Fourth-quarter subscription service revenues summed $254.1 million, up 33.3% year over year.

Professional Service and Others

Professional Service revenues rose almost 37.8% to $57.4 million from the year-ago figure.

Per management, outperformance by Veeva Commercial Cloud and Veeva Vault drove revenues across all segments.

Margin Details

In the reported quarter, adjusted gross profit increased 31.4% year over year to $225.5 million. Adjusted gross margin was 72.4%, which contracted 150 basis points (bps).

Adjusted operating income totaled $103.4 million, up 33.2% year over year. In the quarter under review, adjusted operating margin fell 310 bps to 39.7%.
Meanwhile, operating expenses totaled $122.1 million, up 40% year over year.

Guidance

For the first quarter of fiscal 2021, Veeva Systems expects revenues between $327 million and $328 million.

Adjusted EPS is projected between 59 and 60 cents.

For fiscal 2021, revenues are expected within $1.40-$1.41 billion.

Adjusted EPS is expected at $2.50.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Veeva has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Veeva has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Veeva Systems Inc. (VEEV): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.