Veeva Systems Inc. shares rose on Thursday after Stifel raised its price target to $300 from $275 while maintaining a Buy rating, following stronger-than-expected fiscal second-quarter results.
The cloud software provider reported adjusted earnings per share of $2.35, exceeding the $2.22 estimate, and revenue of $928 million, ahead of the $905.4 million forecast. Subscription revenue grew 16.3% year-over-year, while services revenue climbed 24%, driven by CRM migrations to Vault and AI-related projects. Gross profit margin remained at 75%, and EBIT margins held steady at approximately 45%.
Stifel also adjusted its third-quarter guidance, projecting subscription growth of 16%, slightly above the company’s forecast of 15%. For the fourth quarter, the firm expects growth to moderate to around 15%, while Veeva guided to approximately 12.5%. Over the next two years, Stifel models subscription growth above consensus at 14% for fiscal 2028, supported by sustained services growth and margins above 44% through early 2029.
The stock was trading near $267 in morning trading, reflecting a valuation of roughly 30 times enterprise value to free cash flow, including stock-based compensation. Analysts highlighted Veeva’s position as a consolidator in the pharmaceutical software market, with renewed activity among top 20 drugmakers and ongoing Vault CRM deployments. AI initiatives, including Falcon and Vault AI, were noted as progressing with early adopters, though monetization timelines remain uncertain.
