MSFT - Veeva Systems: Strong Reasons To Buy And Hold The Shares

2024-04-18 01:10:44 ET

Summary

• Veeva Systems is performing well and demonstrating strong management execution, making it a buy.
• The company's R&D solutions and Veeva Vault CRM migration are key factors for future growth.
• Veeva's business model is resilient, and it has a strong competitive advantage over competitors like IQVIA and Google/Microsoft in the healthcare industry.
• I rate the stock as a buy for long-term investors.

I rate Veeva Systems (VEEV) as a buy as the company is performing as expected while showing new milestones and demonstrating excellent management execution to keep offering new added-value software and cloud services that support the company in strengthening its competitive advantages. In my last article about Veeva in December 2023, its stock was trading at $190 per share, while now the stock price is trading at around $200 after peaking at $234 per share. I developed my bullish case, stating that there was a recovery in the perception of the macroeconomic environment, particularly speaking about a possible stop in the interest rate hikes by the Fed for 2024, and that that scenario could improve Veeva's customer expectations in the near future, so they might be more keen to spend more on Veeva's products. However, there is some uncertainty as it seems that the FED could decide not to reduce the interest rates for a longer period, so Veeva's stock price is returning to attractive levels again. In this article, I will supply new information that reinforces my bullish case for Veeva as a long-term holding. In addition, I will offer my intrinsic value, considering the information about the last results of FY 2024.

Context

The revenue growth for FY 2024 was 9.7% YoY, and the EPS growth was 7.3% YoY, which exceeded analysts' expectations by 3.2% . Revenue growth in FY 2023 and FY 2022 was 16% and 26%, respectively, so it's clear that Veeva experienced a deceleration as a result of factors more associated with a deceleration of the demand of the healthcare industry in the last 2 years....

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