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On Thursday, Stifel analysts increased the price target for Veeva Systems (NYSE:VEEV) to $295 from $272, while maintaining a Buy rating on the stock. The company, which boasts a "GREAT" financial health score according to InvestingPro, saw its first-quarter revenue performance exceed expectations, with subscription revenue growth of 19% year-over-year, contributing to a significant rise in billings, margins, and earnings per share (EPS).
The company’s subscription services, which make up 85% of its total revenue, saw a 19% year-over-year increase, with the usage component of its marketing analytics business, accounting for 8% of revenue, being the primary driver of this growth. With a strong current ratio of 4.51 and minimal debt, Veeva’s robust balance sheet supports its growth initiatives. The surge is attributed to the ongoing shift of large pharmaceutical companies towards digital marketing, which also positively impacts other companies in the sector.
Veeva Systems has raised its revenue growth guidance for FY26 (January) from 11% to 13%, taking into account the first-quarter outperformance and additional foreign exchange tailwinds. Concurrently, the company’s EPS growth forecast has been elevated from 11% to 15% year-over-year. Despite this optimistic outlook, the guidance suggests a deceleration of growth throughout the year, from 19% in the first quarter to low double digits by year-end. This conservative projection comes despite management’s more assertive commentary.
Following the release of the report, Veeva Systems’ stock experienced a 15% jump in after-market trading. Trading at a P/E ratio of 53.14, the stock currently sits near its InvestingPro Fair Value. This increase is likely a reflection of the revised estimates and a rebound from the stock’s previous underperformance relative to the iShares Expanded Tech-Software Sector ETF (IGV), which Veeva underperformed by 18 points since mid-March. For deeper insights into Veeva’s valuation and growth prospects, including 10 additional ProTips and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro.
The report underscores the resilience of Veeva Systems’ business model and its consistent execution, as noted by the Stifel analyst. The company’s strong first-quarter results and revised full-year guidance have positively influenced the analyst’s outlook, leading to the raised price target.
In other recent news, Veeva Systems reported impressive first-quarter earnings, with an earnings per share (EPS) of $1.97, surpassing analyst predictions by $0.23. The company achieved revenue of $759 million, exceeding the consensus estimate of $728.32 million, marking a 17% increase compared to the same quarter last year. Veeva’s subscription services revenues rose by 19% year-over-year, contributing significantly to its robust financial performance. Analysts responded positively, with Needham & Company raising its price target for Veeva to $300 and maintaining a Buy rating, citing the company’s strong execution and strategic moves. Scotiabank (TSX:BNS) also increased its price target to $270, highlighting Veeva’s accelerated subscription revenue growth and market share expansion driven by Crossix. BofA Securities adjusted its price target to $304, noting Veeva’s balanced growth across its R&D and Commercial segments. Raymond (NSE:RYMD) James raised its price target to $310, emphasizing Veeva’s resilience in a challenging macroeconomic environment and its strategic importance to pharmaceutical customers. The company’s introduction of Veeva AI and expansion of commercial data offerings with Veeva CRM Pulse further reflect its commitment to innovation and growth.
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