Unlock: Veeva Systems (VEEV) – Monster Winner for Clients

It pays to do fundamental research. Here is bullish view we presented to clients day before earnings. Stock +7% today after strong quarter with beat and raise. To learn more about our approach and how you can become a successful trader, sign up for 2 week trial and test drive live chat room with some of the best traders: SUBSCRIBE

November 21, 2016

Veeva Systems (VEEV) – Strong chart. Reports earnings tomorrow, November 22, after market close. Unusual buyers of 1,700 March 44 calls today for $2.35 to $2.40 offer. Approx $400,000 bullish bet in leap calls.

Q2 Highlights from August 30 –

– Q2 EPS $0.15 vs. $0.13 estimate, beat
– Q2 Revenues $131.3M vs. $126.6M estimate, beat
– Q2 Revenues +34% YoY
– Q2 Subscription Revenues +40 YoY
– Q2 Billings Growth +32% YoY
– Q2 Margins 28% vs. 23.8% estimate, big beat
– Q3 EPS Guidance $0.15 vs. $0.14 estimate, beat
– Q3 Revenue Guidance $135.2M vs. $133M estimate, beat
– FY2017 EPS Guidance $0.60 vs. $0.57 estimate, beat
– FY2017 Revenue Guidance $526M vs. $518M estimate, beat

Broad strength across the core Commercial/CRM business (expansion deals and add on offerings) and Vault business (namely eTMF, PromoMats, QMS). The company reported 100 customers with multiple Vault offerings double from 2Q. Keeping in mind that CRM last week reported very quarter and raised guidance, VEEV’s core CRM business growth guidance of +9% through FY2021 (long term view) appears easily beatable once again tomorrow night.

Investor Day Highlights from September 29 –

First of all, given investor day was so late into Q3, the company obviously had very good view on how the quarter was shaping up. Guidance provided for +17% growth YoY in core CRM cloud (well ahead of +9% goal). On the product development side, management showcased suite of 10 products currently being built on the Vault platform (future growth driver). Here is a line from BAML research that stands out:

“The company is in the early stages of generating organic growth via Vault. Today, Vault is running in 278 account (of 450+ total), and each Vault customer is running 1.77 Vault applications on average, up from 1.48 in FY14. With 10 applications in the suite and numerous other applications on the way, we believe that Veeva is the early stages of cross selling Vault.”