➡️ This is a step-by-step stock review to determine if Veeva Systems (VEEV) stock is a good buy. In this article, we’ll help you understand the company, where the company is going, the competition, and the leadership. This way you can make a more confident investment decision.
Veeva is a cloud-computing company focused on the pharmaceutical and life science industries. They were founded in 2007, headquartered in Pleasanton, CA, and have office locations in Spain, China, Japan, Australia, and Brazil.
Table of Contents
- Step 1: Tykr Rating
- Step 2: Veeva Company History
- Step 3: Veeva Business Model
- Step 4: Veeva News
- Step 5: Veeva Competition
- Step 6: Veeva 4Ms
- Step 7: Is Veeva (VEEV) stock a good buy?
Step 1: Tykr Rating
➡️ Goal: When you look at a stock, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 72/100
- MOS: 0%
- Share Price: $173
- Fair Value: $175
Step 2: Veeva Company History
➡️ Goal: It’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- In 2007, Veeva Systems was founded by Peter Gassner and Matt Wallach.
- In 2010, they launched their CRM for life sciences.
- In 2012, the CRM achieves 85% market share.
- In 2012, they launched their Vault platform.
- In 2013, they went public.
- In 2013, they launched their CRM on a mobile app.
- In 2015, they expand to 5 office locations around the globe.
- In 2016, they enter the consumer product industry.
- In 2017, they launched 20 life science-specific apps.
- In 2018, they launched a consumer product-specific regulatory application.
- In 2019, they served 47 of the top 50 pharmaceutical companies in the world.
- In 2019, they passed $1B in annual revenue.
- In 2022, Forebs awarded Veeva as the top remote work company.
- In 2022, Inc. labeled Veeva as one of the top 10 best-led companies.
Step 3: Veeva Business Model
How does Veeva make money?
➡️ Goal: It’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Veeva’s revenue channels are broken down into five major areas:
- Veeva Commercial Cloud
- Veeva Data and Analytics
- Veeva Development Cloud
- Veeva Business Consulting
- Professional Services and Support
They are designed to address pharmaceutical, biotechnology, and medical device companies’ most pressing strategic needs in their commercial and R&D operations.
Veeva Commercial Cloud
A suite of software, data, and analytics solutions built specifically for life sciences companies to efficiently and effectively commercialize their products. Veeva Commercial Cloud includes solutions for the sales, medical affairs, and marketing functions of a life sciences company:
- Veeva CRM and Veeva Medical CRM enable customer-facing employees. This includes life sciences sales representatives and medical science liaisons to manage, track, and optimize engagement with healthcare professionals with a single, integrated solution.
- Veeva Align enables life sciences companies to perform fast, accurate territory alignments. Through native integration with Veeva CRM, Veeva Align delivers seamless field collaboration to increase accuracy and minimize manual effort.
- Veeva Digital Events includes Veeva CRM Events Management which enables the planning, management, and execution of group meetings with healthcare professionals, and tracks and manages spending to meet transparency reporting requirements.
- Veeva Vault for Commercial Content Management is a unified suite of cloud-based, enterprise content and data management applications. The Veeva Vault applications primarily used by the commercial and medical departments of life sciences companies to manage content include:
Veeva Data and Analytics
- Veeva Link provides strategic market insights and real-time customer intelligence on key scientific experts, leaders, and influencers. Veeva Link associates these global experts with millions of actions, including scholarly publications, clinical trials, medical congresses, associations, and social media activity. This helps life sciences companies better understand the full impact of medical activities, identify new experts and HCPs with whom they should connect, and drive more relevant, coordinated engagements.
- Veeva Crossix provides pharmaceutical brands with a best-in-class analytics platform to maximize media investments and drive greater marketing effectiveness. Patented Crossix SafeMine technology connects health data and non-health data, including consumer and media data for US patients, in an accurate, privacy-safe way. Crossix DIFA uses that data to enable real-time measurement and optimization of complex, cross-channel media campaigns aimed at patients and healthcare professionals.
- Veeva Data Cloud provides longitudinal U.S. patient data for both retail and specialty distribution channels and prescriber data for launch planning, patient segmentation, commercial analytics, artificial intelligence, territory design, and targeting. All of these healthcare data sets support the industry’s need for a modern solution for more precise targeting. Veeva Data Cloud is powered by Veeva Crossix privacy-safe processes and an expanding health data set.
- Veeva OpenData provides healthcare professional and healthcare organization data that includes demographic information, license information and status, specialty information, affiliations, and other key data that is crucial to customer engagement and compliance. In the life sciences industry, this is referred to as customer reference data. Veeva OpenData Explorer gives users the ability to access comprehensive customer reference data through a web-based portal.
- Veeva Nitro is a data science and analytics platform that connects commercial data sources for actionable insights and agile decision-making. With an industry-specific data model and standard data connectors, Nitro enables life sciences companies to more easily unify their most important data sources, such as prescription, sales, formulary, and claims data.
- Veeva Network is an industry-specific, customer-master software solution that de-duplicates, standardizes, and cleanses healthcare professional and healthcare organization data from multiple systems and data sources to arrive at a single, consolidated customer master record. Veeva Network comes pre-configured with a data model that is specific to life sciences as well as country, market, and regional data specifications, within a single system to support global harmonization.
Veeva Development Cloud
Includes application suites for the clinical, regulatory, quality, and safety functions of life sciences companies, all built on a proprietary Veeva Vault Platform. Veeva Vault’s unique ability to handle content and data allows us to build content and data-centric applications to help customers streamline end-to-end business processes and eliminate manual processes and siloed systems. Veeva Vault can be deployed one application at a time or as an integrated solution with multiple applications that enable customers to unify and manage important documents and related data in a single, global system.
- Veeva Digital Trials Platform advances clinical trial execution by providing a complete and connected technology ecosystem. The Veeva Digital Trials Platform is comprised of a comprehensive application suite for clinical operations and clinical data management and pre-built connections to applications for clinical research sites and patient engagement. The platform is designed to enable seamless execution and flow of data between clinical trial stakeholders—including patients, research sites, contract research organizations (CROs), and trial sponsors—for faster, more efficient trials that achieve higher data accuracy and increased patient diversity.
- Veeva Site and Patient Engagement Applications include applications intended to make clinical trial participation easier for patients and streamline study execution for research sites and trial sponsors.
- Veeva Vault RIM is a suite of applications that provides fully integrated regulatory information management (RIM) capabilities on a single cloud platform.
- Veeva Vault Quality is the industry’s first unified suite of quality applications for life sciences, contract manufacturers, and suppliers to seamlessly manage quality processes and content in a single platform for greater visibility and control.
- Veeva Vault Safety is a unified suite of applications that helps the pharmacovigilance and safety departments increase efficiency and maintain compliance in the management of end-to-end safety processes. The collection, management, and real-time oversight of adverse events occur in a single system.
Veeva Business Consulting
Veeva Business Consulting provides dedicated teams that are distinct from the professional services and support organization. Veeva Business Consulting provides strategic consulting services and solutions that are often enabled by unique industry-wide perspectives and proprietary data. Engagements typically focus on a particular customer success initiative, strategic analysis, or business process change like commercial strategy, digital engagement, commercial content management, field optimization, and commercial insights and analytics.
Professional Services and Support
Veeva offers professional services to help customers maximize the value of their solutions. The service teams possess industry expertise, project management capabilities, and deep technical acumen. The professional services teams work with systems integrator partners to deliver projects. Here are the following services:
- Implementation and deployment planning and project management;
- Requirements analysis, solution design, and configuration;
- Systems environment management and deployment services;
Some of Veeva’s customers include Accera, Alvotech, Bayer, Biogen, Lilly, Ferrer, Merck, Moderna, Nestle, Novartis, Sobi, and Vertex.
Step 5: Veeva News
➡️ Goal: It’s important to highlight important company-specific news as well as industry-specific news over the last month and year. We don’t need daily news on a company to make buy or sell decisions because we’re investors, not traders. Overall, we want sufficient news to understand where a company and industry are heading over the next year or few years.
This article from fool.com talks about two growth stocks you may want to consider buying and holding for a long time. This includes Doximity and Veeva Systems. Veeva Systems is mentioned because they were able to grow in 2022 when the economy started to decline. They have also seen an increase in free cash flow by 229% over the past five years.
This article from zacks.com highlights an excellent earnings report. Expectations were $1.04 and they reported $1.15. The most recent quarterly revenue came in at $563M compared to $485M one year ago. If you take a closer look at the revenues, net income, and EPS within Tykr over the last 5 years, you can see impressive year-over-year growth.
This article from fool.com lists three smart stocks to buy right now including Salesforce, Zscaler, and Veeva Systems. Veeva Systems is listed because its products have proven to be sticky. Once Veeva secures a contract, most customers don’t leave. In fact, they recently reported a 119% net dollar retention which means customers are not only staying but spending more year over year.
Step 5: Veeva Competition
➡️ Goal: It’s important to understand who the competitors are and how their financials rank against this company. Try to find 5 other competitors to rank against based on Score. The best way to find competitors is to Google “XYZ competition” and replace XYZ with the company name. You can also go to Tykr and click on the “Similar Stocks” tab on each stock to see similar companies in the same industry.
Veeva Systems (VEEV)
- Summary: Watch
- Score: 72/100
- MOS: 0%
- Share Price: $173
- Fair Value: $175
- Revenues: $2.16B
- Market Cap: $27.5B
Doximity (DOCS)
- Summary: On Sale
- Score: 67/100
- MOS: 90%
- Share Price: $30
- Fair Value: $174
- Revenues: $343M
- Market Cap: $6.1B
Agility (AGTI)
- Summary: On Sale
- Score: 67/100
- MOS: 90%
- Share Price: $14
- Fair Value: $92
- Revenues: $1.12B
- Market Cap: $1.9B
Phreesia (PHR)
- Summary: Watch
- Score: 50/100
- MOS: 0%
- Share Price: $34
- Fair Value: $50
- Revenues: $213M
- Market Cap: $1.9B
Teladoc (TDOC)
- Summary: Overpriced
- Score: 39/100
- MOS: 0%
- Share Price: $24
- Fair Value: $32
- Revenues: $2.4B
- Market Cap: $4B
Signify Health (SGFY)
- Summary: Overpriced
- Score: 39/100
- MOS: 0%
- Share Price: $29
- Fair Value: $29
- Revenues: $805M
- Market Cap: $8.6B
Ranking based on Score
- Veeva – 72/100
- Doximty – 67/100
- Agility – 67/100
- Phreesia – 50/100
- Teledoc – 39/100
- Signify Health – 39/100
Step 6: Veeva 4Ms
➡️ Goal: All of our homework on this company leads up to the 4M checklist. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the business, the competition, and the management. If all 4Ms pass, we should have high confidence in buying this stock.
✅ MOS: Veeva’s score of 72/100 shows the financials are strong but the MOS of 0% doesn’t show any upside potential. If you take a closer look at the quarterly EPS, you can see it’s fairly flat over the last 10 quarters but the most recent quarter shows an impressive jump. If profitability continues to increase, the MOS should increase. Although the MOS is 0%, I’m still giving this M a pass because of the higher score and EPS jump.
✅ Meaning: CRMs are very sticky. In simple terms, a CRM (Customer Relationship Management) is a robust platform that keeps track of all leads and customers. Corporations and healthcare organizations are not going to try a CRM for a month or two and then look for another CRM. Typically, how it works is, an organization will go through a due diligence phase to determine which CRM is best for them. In many cases, this can span 6 – 12 months if not longer. After the organization makes its decision, the CRM will be implemented which can take 6 – 12 months as well. After implementation, the organization will commit to using the CRM for 5, 7, 10 years or longer. Overall, enterprise SaaS especially CRM SaaS is a highly lucrative business model.
✅ Moat: There are a few competitors in this space but Veeva is the market leader. What makes Veeva a great product isn’t just the product, it’s the consulting and professional services that are coupled with the product. Strong B2B enterprise software platforms have excellent customer service and support driving their products. We also see this with Palantir and Fortinet. It’s one thing to create a great product but if you want to separate yourself from the competition, you need great people on the front line, talking to customers, and providing them with confidence. Veeva is doing exactly that.
✅ Management: Peter Gassner is the founder and CEO of Veeva. His background is an entertaining and inspiring journey. Based on this article from investors.com, he started and stopped college a few times where he took extended breaks to hike in various parts of the world. Some of those locations included Hawaii, Australia, Malaysia, and Thailand. He tells of a story of how he attempted to hitchhike in Malaysia but was robbed of his cash and passport. To stay calm, he said, “The only important thing is what’s in your mind.” This relates to an inspirational line I try to remind myself which is “life is 10% what happens to you and 90% how you react.” In this case, it sounds like Gassner didn’t freak out. He remained calm and kept moving forward. Long story short, the authorities found him and he was able to get some cash to travel back to the US.
He eventually graduated from Oregon State University with a bachelor’s degree in computer science. He started his career at IBM and then moved on to PeopleSoft where he served in roles including VP and GM. Thereafter he went to Salesforce where he served as SVP. After Salesforce, he took a year off to spend more time with family and consult for a few software companies. After his year off, he decided to start Veeva Systems. What jumps out at me is Gassner is not some corporate troll who wants to work 24/7. The guy took a year off to chill which tells me he cares about living. In fact, “Veeva” is the Latin word for “Live”.
His LinkedIn is written with a more casual vibe with an emphasis on how much fun its been building this company with great people. The Glassdoor rating 78% which is pretty good. I did a deep dive into the ratings and the company places a high priority on work-life balance and sounds like a fun place with fun people. A few negative reviews popped up which highlighted lower pay and lack of training. Based on my past experience, if you like the company you work for but your pay is low, put in the work and negotiate a higher salary. That’s easily overcome with personal development. As for the lack of training tools, that’s a lack of resourcefulness. If you want to learn faster, take the initiative. Network internally to get up-to-speed faster. I don’t see a CEO approval rating on Gassner but this video shows Gassner talking about how he leads the company. He highlights that as organizations grow, they become more bureaucratic and they fight against that! I love that callout. Overall, Gassner is a passionate founder who treats his employees right.
Step 7: Is Veeva stock a good buy?
All 4Ms pass. Veeva is a well-run company serving a niche industry that will continue requiring technical assistance over the next 10 years. We’ve seen how Salesforce CRM has grown over the previous decades and in this circumstance, we’re seeing Veeva double down on the power of CRM to serve the pharmaceutical and life science industries.
I don’t have any motivation to invest in specific pharma companies because government regulations can cause these types of companies to drastically change overnight, literally. In other words, one policy change can cause a pharma stock to be cut in half in less than 24 hours. However, I look at Veeva like I do the gold rush in the 1850’s. The people who actually made money during the gold rush were not gold miners, it was the people selling tools (shovels, pick axes, and jeans) to gold miners. That’s exactly what Veeva is doing. No matter if a Pharma company is a good stock or not, we don’t care. Veeva is selling cloud solutions to Pharm or in other words, selling shovels to gold miners.
If you’re looking for a cloud-based tech company that serves the healthcare industry, Veeva is worth a look.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.
If you found this stock review interesting, you may also like this review on Palantir.