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What's in Store for Veeva Systems (VEEV) in Q4 Earnings?

Veeva Systems Inc. VEEV is scheduled to report fourth-quarter fiscal 2018 results on Feb 27, after the market closes. Notably, the company missed earnings estimates in the trailing four quarters.

However, Veeva Systems’ price movement continues to be robust. The company’s shares have gained 42.5% year to date compared with the broader industry’s 33.4% rally.

Let us take a look at how things are shaping up before the release. The results are expected to show steady growth on Subscription-Services revenues. Strong growth in the segments is likely to be supported by Veeva Vault, OpenData and the company’s latest technologies in the commercial cloud platform.

Veeva Systems Inc. Price and Consensus

 

Veeva Systems Inc. Price and Consensus | Veeva Systems Inc. Quote

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Subscription Services in Focus

Recently, the company strengthened the recurring part of its revenue mix with significant growth in subscription revenues. Moreover, launches of the Veeva Vault and the Veeva Commercial Cloud platforms are encouraging. The company thrives on considerable strength in its CRM platform.

The Zacks Consensus Estimate for Subscription services revenues is pegged at $148 million, reflecting sequential growth of 4.2%. The figure reflects an increase of 23.3% year over year.

The company’s subscription revenue-growth estimate of at least 20% through fiscals 2019 and 2020 buoy optimism. In fact, the flagship Vault platform is expected to drive Subscription revenues. In the last quarter, Veeva’s Vault content management products added a record number of new customers. The Vault family now represents 40% of total subscription revenues, up from 33% in the year-ago quarter.

Other Factors at Play

View Upbeat

For fourth-quarter fiscal 2018 ending Jan 31, 2018, Veeva Systems expects total revenues in the range of $179-$180 million. Meanwhile, adjusted operating income is expected between $50 million and $51 million. Adjusted earnings are estimated between 21 cents and 22 cents.

For fiscal 2018, total revenues are anticipated in the band of $679.7-680.7 million, higher than the previous range of $672-$674 million. The company reiterated the adjusted operating income projection at $200 million to $202 million and adjusted earnings between 86 cents and 87 cents.

Estimates Solid

For the fourth quarter, the Zacks Consensus Estimate for adjusted earnings is pegged at 21 cents per share, reflecting a decline of 4.6% year over year. However, the Zacks Consensus Estimate for revenues is $180.1 million, showing an increase of 20% year over year.

For fiscal 2018, the Zacks Consensus Estimate for earnings is pegged at 91 cents, up 24.7% year over year. For revenues, the Zacks Consensus Estimate is $680.7 million.

Professional Services Drive Growth

The Zacks Consensus Estimate for Professional services revenues is pegged at $32.1 million for the fourth quarter, reflecting an improvement of 4.7% year over year. In fact, professional services has been growing in that mid-to-high teens for the last three years. In the coming quarters, management at Veeva Systems expects mid-to-high single-digits growth in the segment.

Veeva System’s commercial excellence through integrated master data, compliant commercial content, multichannel CRM and collaboration between sponsors, CROs and sites, provides it a competitive edge in the MedTech space.

Here is what our quantitative model predicts.

Our proven model does not show earnings beat for Veeva Systems this quarter. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP:  Veeva Systems has an Earnings ESP of -1.56%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Veeva Systems carries a Zacks Rank #3.

Stocks to Consider

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Universal Health Services UHS has an Earnings ESP of +1.96% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis EXEL has an Earnings ESP of +8.94% and a Zacks Rank #2.

Amphastar Pharmaceuticals AMPH has an Earnings ESP of +264.71% and a Zacks Rank #2.

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Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
 
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