I think Veeva Systems (VEEV) has a favorable long-term outlook yet it appears to have fallen out of favor with the investment community.
In my April 9 post, I disclosed the purchase of additional shares in a 'Core' account within the FFJ Portfolio thus bringing my exposure to 200 shares.
There has been no material change to the business subsequent to that post yet VEEV's share price has weakened. This has prompted me to acquire an additional 100 shares on April 22 @ ~$197.96.
Valuation
When I wrote my April 9 post, VEEV's valuation based on my $213.66 purchase price was:
- FY2025 - 24 brokers - mean of $6.15 and low/high of $6.05 - $6.19. Using the mean estimate, the forward adjusted diluted PE is ~34.7.
- FY2026 - 21 brokers - mean of $6.81 and low/high of $6.23 - $7.09. Using the mean estimate, the forward adjusted diluted PE is ~31.4.
- FY2027 - 8 brokers - mean of $7.65 and low/high of $7.04 - $8.30. Using the mean estimate, the forward adjusted diluted PE is ~28.
There has been no change to the forward adjusted diluted EPS estimates from the brokers which cover the company. VEEV's valuation using my ~$197.96 purchase price is now:
- FY2025 - 24 brokers - mean of $6.15 and low/high of $6.05 - $6.19. Using the mean estimate, the forward adjusted diluted PE is ~32.2.
- FY2026 - 21 brokers - mean of $6.81 and low/high of $6.23 - $7.09. Using the mean estimate, the forward adjusted diluted PE is ~29.1.
- FY2027 - 8 brokers - mean of $7.65 and low/high of $7.04 - $8.30. Using the mean estimate, the forward adjusted diluted PE is ~25.9.
Final Thoughts
My current VEEV exposure is 300 shares.
VEEV is:
- growing its top line (FY2015 revenue of $0.313B versus $2.364B in FY2024 - it had a January 31, 2024 FYE);
- cash rich with ~$4B of cash and cash equivalents and marketable securities at FYE2024 versus $1.266B of TOTAL liabilities of which $1.050B is deferred revenue;
- profitable; and
- is generating very strong free cash flow (FCF). In FY2015 - FY2024 it generated (in millions of $) 41, 58, 137, 222, 311, 437, 551, 764, 780, and 885.
As noted in multiple prior posts, I seek to acquire shares in great companies have fallen out of favor with the investment community; VEEV appears to be such a company.
I wish you much success on your journey to financial freedom!
Note: Please send any feedback, corrections, or questions to [email protected].
Disclosure: I am long VEEV.
Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your own research and due diligence. Consult your financial advisor about your specific situation.
I wrote this article myself and it expresses my own opinions. I do not receive compensation for it and have no business relationship with any company mentioned in this article.
