VEEV Stock Study (1-20-26)

I recently did a stock study on Veeva Systems, Inc. (VEEV, $222.21). Previous stock studies are here and here.

M* writes:

     > Veeva is the global leading supplier of cloud-based software
     > solutions for the life sciences industry. The company’s best-of-
     > breed offerings address operating and regulatory requirements
     > for customers ranging from small, emerging biotechnology
     > companies to departments of global pharmaceutical manufacturers.
     > The company leverages its domain expertise to improve the
     > efficiency and compliance of the underserved life sciences
     > industry, displacing large, highly customized and dated
     > enterprise resource planning systems that have limited
     > flexibility. Its two main products are Veeva CRM, a customer
     > relationship management platform for companies with a salesforce,
     > and Veeva Vault, a content management platform that tackles
     > various functions within any life sciences company.

Since 2018 [FY ends Jan 31; references to year at BI and Value Line (VL) incremented to align], this medium-size company has grown sales and EPS at annualized rates of 22.4% and 21.3%, respectively (earlier years excluded due to low base that otherwise further inflate EPS growth rate). Lines are up, straight, and parallel. Shares outstanding increase 7.5% (1.0% per year). VL gives an Earnings Predictability score of 95.

Since 2018, PTPM leads peer and industry averages while increasing from 23.1% to 33.5% (’25) with last-5-year mean of 27.3%. ROE leads peer and industry averages despite falling from 16.0% to 12.8% (’25) with last-5-year mean of 14.0%. Debt-to-Capital is less than peer and industry averages while ranging from 0% (’18 and ’19) to 2.7% (’21) with last-5-year mean of 1.7%.

Quick Ratio is 7.4 and Interest Coverage N/A (no long-term debt) per M* who assigns “Wide” Economic Moat, rates the company “Exemplary” for Capital Allocation, and gives an A grade for Financial Health (per BetterInvesting website). VL rates the company A for Financial Strength.

With regard to sales growth:

• YF gives ACE YOY 15.5% and 12.1% for ’26 and ’27, respectively (based on 24 analysts).
• Zacks gives ACE YOY 15.1% and 11.7% for ’26 and ’27, respectively (10 analysts).
• VL projects 13.1% annualized growth from ’25-’29.
• CFRA projects 15.4% YOY and 13.7% per year for ’26 and ’25-’27, respectively.
• M* offers a 2-year ACE of 13.8%. and projects 13.3% per year from ’25-’30 (Equity Report).

I am forecasting below the range at 11.0% per year.

With regard to EPS growth:

• MarketWatch projects 11.7% and 12.3% per year for ’25-’27 and ’25-’28, respectively (based on 33 analysts).
• Nasdaq.com gives ACE 6.3% YOY and 8.8%/year for ’27 and ’26-’28 (10 / 10 / 6 analysts for ’26 / ’27 / ’28).
• Seeking Alpha projects 4-year annualized growth of 18.9%.
• Finviz gives ACE 5-year annualized growth of 14.1% (8).
• LSEG estimates LTG at 12.7%.
• YF gives YOY ACE 20.3% and 8.2% for ’26 and ’27, respectively (29).
• Zacks gives YOY ACE 20.2% and 6.8% for ’26 and ’27 (11) along with 5-year annualized growth of 23.8%.
• VL projects 13.0% annualized growth from ’25-’29.
• CFRA projects growth of 20.3% YOY and 13.9% per year for ’26 and ’25-’27 along with 3-year CAGR of 14.0%.
• M* gives long-term growth ACE of 25.6% and projects 13.9% per year from ’25-’30 in Equity Report.

My 12.0% forecast is below the long-term-estimate range (mean of seven: 15.4%). Initial value is ’25 EPS of $4.32/share instead of 2026 Q3 EPS of $5.34 (TTM).

My Forecast High P/E is 48.0. Since 2018, high P/E ranges from 59.9 in ’25 to 133 in ’21 with a last-5-year mean of 94.7 and a last-5-year-mean average P/E of 71.1 (excluding ’22 low P/E upside outlier of 80.8). I am below the range but outside my comfort zone.

My Forecast Low P/E is 35.0. Since 2018, low P/E ranges from 35.5 in ’19 to 58.0 in ’20 (80.8 upside outlier in ’22 excluded) with a last-5-year mean of 47.4. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $151.20 is default based on initial value above. This is 32.0% less than the previous close and 25.0% less than the 52-week low.

These inputs land VEEV in the HOLD zone with a U/D ratio of 2.0. Total Annualized Return (TAR) is 10.5%.

PAR (using Forecast Average—not High—P/E) of 7.3% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 135 studies done in the past 90 days (my study and 47 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 12.0%, 13.9%, 55.5, and 42.0, respectively. I am lower across the board. VL [M*] projects a future average annual P/E of 35.0 [17.6, which once again seems unreasonably low] that is less than MS (48.8) and less than mine (41.5).

MS high / low EPS are $9.47 / $4.70 versus my $7.61 / $4.32 (per share). My high EPS is less due mainly to a lower growth rate. VL (M*) high EPS of $10.75 ($9.17) is greater than (in the middle of) both.

MS LSPF of $179.90 implies a Forecast Low P/E of 38.3 versus the above-stated 42.0. MS LSPF is 8.9% less than the default $4.70/share * 42.0 = $197.40 that results in more conservative zoning. MS LSPF is still 19.0% greater than mine, however.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. Also backing this assessment is MS TAR exceeding mine by 6.2% per year and a higher LSPF.

With regard to valuation, PEG is 1.2 and 3.2 per Zacks and my projected P/E: slightly overvalued (2.3 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.61. “Quick and Dirty DCF” has stock undervalued by 39%.

Per U/D, VEEV is a BUY under $204/share. BetterInvesting TAR criterion would be met [365.3 / ((14.87 / 100 ) +1 ) ^ 5] ~ $183 given a forecast high price ~$366 (no dividend).

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