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On Tuesday, Stifel analysts upheld their Buy rating and $272.00 price target for Veeva Systems (NYSE:VEEV), a cloud-computing company focused on pharmaceutical and life sciences industry applications. According to InvestingPro data, the company has demonstrated robust financial health with a 16.2% revenue growth over the last twelve months and maintains a strong balance sheet with more cash than debt. The firm’s analysts pointed out that while there is some risk to Veeva’s 2025 guidance due to macroeconomic and regulatory uncertainties, particularly since first-quarter billings significantly influence revenue projections for 2025, the company’s long-cycle research and development segment, which constitutes 53% of its business mix and serves as its core growth engine, is expected to remain relatively stable. With a healthy gross profit margin of 74.5% and strong liquidity ratios, InvestingPro analysis indicates the company is well-positioned to navigate near-term challenges. InvestingPro subscribers have access to 10+ additional exclusive insights about Veeva’s financial strength and market position.
However, there could be potential deferrals or delays in the commercial segment, which accounts for 47% of Veeva’s business. The ongoing transition from the Salesforce (NYSE:CRM) platform is a critical point for the company, as top-20 pharmaceutical companies are anticipated to expedite their decision-making process in the next 12 months, choosing between Veeva and CRM. Notably, Veeva has successfully retained four of the six top-20 pharma companies, including Takeda, which recently opted for CRM.
Despite the focus on the platform transition, Stifel’s analysis suggests that less than 10% of Veeva’s revenue is likely at risk. Moreover, Veeva’s stock is currently trading at 30 times its free cash flow, which aligns with its five-year average. This valuation is considered to carry additional risk if the prevailing economic conditions negatively impact near-term financial results. The company’s current P/E ratio of 54.25 reflects its premium valuation, though InvestingPro’s comprehensive analysis suggests the stock is trading close to its Fair Value. For detailed valuation metrics and expert insights, investors can access Veeva’s complete Pro Research Report, part of InvestingPro’s coverage of 1,400+ US stocks.
In other recent news, Veeva Systems has been active with several key developments. Citi analyst Tyler Radke reaffirmed a Buy rating on Veeva Systems, setting a price target of $307.00, following the company’s strong fourth-quarter performance. The company exceeded expectations with normalized billings surpassing forecasts by 5 percentage points and subscription margins outperforming by 3 points. Veeva introduced Veeva AI, aiming to integrate artificial intelligence into its platform, enhancing productivity for life sciences companies. The AI initiative will be available on a subscription basis starting in December 2025, with plans to boost automation across various functions. Raymond (NSE:RYMD) James analyst Brian Peterson maintained an Outperform rating with a $285.00 price target, noting the company’s robust market position and growing customer base for its Vault CRM product. Additionally, Veeva announced the upcoming retirement of board member Tina Hunt, effective before the 2025 annual meeting of shareholders. The company did not specify plans for her replacement. These developments reflect Veeva’s strategic focus on innovation and maintaining strong client relationships.
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