Will Vault Platform Aid Veeva Systems (VEEV) in Q3 Earnings?

Veeva Systems Inc. VEEV is scheduled to report third-quarter 2017 results on Dec 5, after market close. The results are expected to show steady growth on Subscription services revenues.Strong growth in the segments is likely to be driven by Veeva Vault, OpenData and the company’s latest technologies in the commercial cloud platform.

Now coming to estimates, the Zacks Consensus Estimate for Professional services revenues stands at $31.9 million for the third quarter, down from the previous quarter’s $32.3 million. The company expects services revenues to be flat with the preceding quarter and decline sequentially in the fourth quarter owing to lesser billable days. Also, the Zacks Consensus Estimate for Subscription services revenues is pegged at $140 million, reflecting sequential growth of 4.5%.

Meanwhile, Veeva Systems beat estimates in the last quarter by 15%. Subscription services revenues grew 28% year over year. Professional services revenues increased almost 23.4%, primarily on strong adoption of the Vault platform.

Notably, in the last reported second quarter, Subscription services revenues were up 28% year over year. Professional services revenues increased almost 23.4%, primarily owing to strong adoption of the Vault platform.

Veeva Systems Inc. Price and EPS Surprise

 

Veeva Systems Inc. Price and EPS Surprise | Veeva Systems Inc. Quote

 

Other Factors at Play

View Upbeat: For third-quarter fiscal 2017 ending Oct 31, 2017, Veeva Systems expects total revenues in the range of $171-$172 million. Meanwhile, adjusted operating income is expected between $50 million and $51 million. Adjusted earnings are projected between 21 cents and 22 cents.

Notably, the Zacks Consensus Estimate for revenues is currently pegged at $172.4 million. Also, the Zacks Consensus Estimate for earnings is at 22 cents.

Veeva Vault to Drive Growth: Veeva Vault is a cloud content management platform specifically built for life sciences. In the third quarter, Veeva Systems announced that Veeva Vault Development Cloud is growing as the technology foundation for developing drug in life sciences. According to the company, more than 100 customers have adopted multiple applications across Vault Development Cloud suites Vault Clinical, Vault Quality, and Vault RIM to drive efficiency and maintain compliance throughout the product lifecycle. So, we expect an increasing customer base to drive revenues in the yet-to-be reported quarter. Currently, Veeva Vault application serves areas for life sciences and clinical markets. Vault EDC, Vault CTMS, Vault eTMF and Study Startup enhances the company’s Vault portfolio. 

Strategic Partnerships: The company has announced a strategic partnership with Accenture to provide Veeva Vault RIM solutions to life sciences and pharma companies. However, the terms of the deal have been kept under wraps. Such deals are expected to strengthen Veeva Systems customer base and drive subscription revenues.

Here is what our quantitative model predicts:

Our proven model does not conclusively show an earnings beat for Veeva Systems this quarter. This is because a stock needs to have both 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 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Veeva Systems currently carries a Zacks Rank #3 (Hold).

Stocks Worth a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Zumiez Inc. ZUMZ has an Earnings ESP of +0.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters, Inc. AEO has an Earnings ESP of +1.04% and a Zacks Rank #2.

G-III Apparel Group, Ltd. GIII has an Earnings ESP of +1.44% and a Zacks Rank #3.

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