VEEV Hits Key Support – Is This The Buying Opportunity?
Veeva Systems (VEEV) should be on your watchlist. Here is why – it is currently trading in the support zone ($255.74 – $282.66), levels from which it has bounced meaningfully before. In the last 10 years, the stock received buying interest at this level 3 times and subsequently went on to generate 20.8% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 7/20/2020 | 21.6% | 211 |
| 3/11/2021 | 9.7% | 48 |
| 5/7/2021 | 31.2% | 90 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For VEEV Read Buy or Sell VEEV Stock to see how convincing this buy opportunity might be.
Here are some quick data points:
- Revenue Growth: 14.8% LTM and 14.1% last 3 year average.
- Cash Generation: Nearly 42.2% free cash flow margin and 27.0% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for VEEV was 13.2%.
- Valuation: VEEV trades at a PE multiple of 56.1
- Opportunity vs S&P: Compared to S&P, you get higher valuation, higher revenue growth, and better margins
Veeva Systems provides cloud-based software and professional services for life sciences, including implementation, deployment planning, project management, requirements analysis, solution design, and configuration globally.
| VEEV | S&P Median | |
|---|---|---|
| Sector | Health Care | – |
| Industry | Health Care Technology | – |
| PE Ratio | 56.1 | 24.0 |
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| LTM* Revenue Growth | 14.8% | 5.1% |
| 3Y Average Annual Revenue Growth | 14.1% | 5.2% |
| Min Annual Revenue Growth Last 3Y | 13.2% | -0.3% |
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| LTM* Operating Margin | 27.0% | 18.6% |
| 3Y Average Operating Margin | 22.0% | 17.8% |
| LTM* Free Cash Flow Margin | 42.2% | 13.1% |
*LTM: Last Twelve Months
That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
What Is Stock-Specific Risk If The Market Crashes?
That said, Veeva isn’t immune to big drops. It fell around 27% in both the 2018 correction and the Covid crash. The inflation shock hit even harder, with a 56% plunge from peak to trough. So, while VEEV has strong fundamentals, it can still take a serious hit when the market turns sour. The data reminds us, no stock is fully safe during wide-scale turmoil.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read VEEV Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.