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Will Veeva Systems (VEEV) Pull an Earnings Surprise in Q3?

Veeva Systems Inc. VEEV is set to report third-quarter fiscal 2016 earnings results on Nov 24. Last quarter, the company reported earnings of 10 cents, which were in line with the Zacks Consensus Estimate. Notably, the company has posted an average positive surprise of 6.25% over the last four quarters.

Let's see how things are shaping up for this announcement.

Factors at Play

Extended use of multi-channel Customer Relationship Management (CRM) by customers continues to be a key growth catalyst for the company. Non-CRM products are also beginning to contribute to the company's overall business.

We believe Veeva vault - the cloud-based content management solution - holds substantial long-term prospects. The company's partnerships with the likes of Accenture, Deloitte, HighPoint, ZS Associates and drug giant GlaxoSmithKline is another key growth-driving factor.

However, foreign exchange volatility, intensifying competition and customer concentration are expected to remain overhangs in the near term.

Earnings Whispers

Our proven model does not conclusively show that Veeva is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Veeva has an earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 10 cents.

Zacks Rank: Veeva carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Air Methods AIRM has an earnings ESP of +3.08% and a Zacks Rank #1.

Cytokinetics CYTK has an earnings ESP of +8.33% and a Zacks Rank #1.

HealthEquity HQY has an earnings ESP of +14.29% and a Zacks Rank #1.

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CYTOKINETCS INC (CYTK): Free Stock Analysis Report

AIR METHODS CRP (AIRM): Free Stock Analysis Report

VEEVA SYSTEMS-A (VEEV): Free Stock Analysis Report

HEALTHEQUITY (HQY): Free Stock Analysis Report

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


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

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