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On Thursday, Stifel analysts updated their outlook on Veeva Systems (NYSE:VEEV), a cloud-computing company focused on pharmaceutical and life sciences industry applications, by increasing the price target from $272.00 to $295.00. The firm maintained a Buy rating on the stock, reflecting a positive assessment of the company’s first-quarter performance. According to InvestingPro data, analysts’ price targets for VEEV range from $201 to $290, with the stock currently receiving a moderate buy consensus recommendation.
Veeva Systems reported a significant outperformance in its first-quarter revenue, with subscription revenue climbing by 19% year-over-year, contributing to a total revenue growth of 17%. This robust growth led to a notable outperformance in billings, margins, and earnings per share (EPS). The subscription business, which makes up 85% of Veeva’s revenue, along with a 7% increase in services, were key factors in the quarter’s success. InvestingPro data shows the company maintains impressive profitability with a 74.5% gross margin and strong financial health, earning a "GREAT" overall rating. The company’s solid balance sheet is highlighted by more cash than debt and a healthy current ratio of 4.5.
The usage component of the company’s marketing analytics business, accounting for 8% of revenue, was particularly strong. This was attributed to the ongoing shift towards digital marketing by large pharmaceutical companies, a trend that is benefiting the sector overall. As a result of the quarter’s performance, Veeva Systems has raised its revenue growth guidance for fiscal year 2026 (ending in January) from 11% to 13%, and its EPS growth forecast from 11% to 15% year-over-year.
Despite this upward revision, the guidance suggests a deceleration of growth throughout the year, from 19% in the first quarter to low double-digits by the end of the year. Stifel’s analyst noted that this projection seems conservative, even though management’s commentary suggested otherwise.
Following the earnings report, Veeva Systems’ stock experienced a 15% surge in after-market trading. This leap was likely a reaction to the upward revisions to the company’s performance estimates and a rebound from its previous underperformance relative to the iShares Expanded Tech-Software Sector ETF (IGV), which Veeva had trailed by 18 points since mid-March. InvestingPro subscribers have access to over 10 additional exclusive insights about VEEV’s valuation and growth prospects, along with a comprehensive Pro Research Report that provides deep-dive analysis of the company’s fundamentals and market position.
The report underscored the resilience of Veeva Systems’ business model and its continued strong execution, leading Stifel to raise the price target to $295. This adjustment reflects the firm’s confidence in the company’s trajectory and its solid first-quarter results.
In other recent news, Veeva Systems reported strong financial results for the first quarter of fiscal year 2026, with earnings per share (EPS) of $1.97, surpassing the forecasted $1.74. The company’s revenue reached $759 million, exceeding the anticipated $728.32 million. This performance was bolstered by the Crossix segment, which specializes in healthcare marketing analytics and contributed significantly to the company’s success. Veeva also announced billings of $714 million for the quarter, representing a 16% growth and surpassing the forecast of $680.5 million.
Additionally, the company increased its full-year revenue forecast to approximately $3.095 billion, up from the previously estimated $3.047 billion. Evercore ISI raised its price target for Veeva to $285 from $240, maintaining an In Line rating, following the strong first-quarter results. Morgan Stanley (NYSE:MS) also adjusted its price target for Veeva, increasing it to $210 from $201, while maintaining an Underweight rating due to perceived risks in the CRM market.
Veeva’s Vault Customer Relationship Management (CRM) system continues to see accelerated adoption, with the number of live customers expected to increase significantly by next year. The company is also preparing to enter the broader CRM market with a new horizontal offering, anticipated for limited release by the end of calendar year 2025. These developments reflect Veeva’s strategic expansion and strong market position amidst a competitive landscape.
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