Veeva Systems Inc. faces scrutiny after its shares rallied 38% since the company’s last earnings release as investors weigh whether the momentum in artificial intelligence and customer relationship management (CRM) software can sustain its valuation.
The stock, trading at $246.78, is up sharply from $178.83 reported on June 5, when Veeva posted adjusted earnings per share of $2.24, beating estimates by 4.7%. Revenue for the quarter ended April 30 reached $882.9 million, exceeding the $857.75 million forecast by 2.9%.
Analysts now expect the company to report adjusted EPS of $2.22 for the fiscal second quarter ending July 31, reflecting an 11.6% year-over-year increase. Revenue is projected at $905.41 million, a 14.7% rise from the prior year and a 2.5% sequential gain from the first quarter. The company trades at 26.7 times forward earnings, above its historical average.
Veeva’s CRM platform has gained traction among pharmaceutical clients, including Regeneron Pharmaceuticals and Biogen, which adopted its Vault CRM system. Management has set a target to convert 13 to 14 of the top 20 global pharma firms to its platform, following Eli Lilly’s recent commitment. Analysts estimate subscription revenue growth of 17% year-over-year in the quarter, down from the 20% average over the prior three quarters.
The stock retains a consensus buy rating from 29 analysts, with a mean price target of $255.93, implying a 3.7% upside from current levels.
