Analyst Commentary
Sills explained that the provider of cloud-based software solutions for the life sciences industry has now shown a 27 percent-plus growth in billings in the past two quarters which now gives him "greater confidence" that the company is in the early stages of a multi-billion-dollar revenue opportunity with Vault. In fact, the analyst sees Veeva's Vault opportunity in both the large pharmaceutical installed base (which presents an additional $400 to $500 million revenue opportunity) along with life sciences start-ups, which was previously un-addressed.Sills also noted that commercial could also sustain a "health" mid-teens growth rate due to: 1) cross selling of PromoMats, 2) cross-selling CRM add-ons, 3) expansion in the already existing installed base and 4) new customer wins intentionally, especially in Japan and Europe.
Finally, the analyst explained that his new $70 price target represents a 42x EV/FCF multiple on his 2018 estimates which is "reasonable" relative to the analyst's estimated three-year FCF compounded annual growth rate of 30 percent, which is likely to be proven conservative.
At time of publication, shares of Veeva were up 6.33 percent at $65.65.
Related Links: Benzinga's Top Upgrades, Downgrades For May 26, 2017 Looking To Invest In The Cloud? 7 Stocks To Own In 2017© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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