Pharma Wins And New Partnerships Will Drive Cloud Momentum In Coming Quarters

Key Takeaways

• Resolution of interoperability challenges and AI integration strengthens Veeva's market position, enabling broader product adoption and greater revenue and margin growth opportunities.
  
• Expansion into new verticals and product suites, combined with enhanced consulting services, increases recurring revenue, customer retention, and long-term earnings predictability.
  
• Competitive pressures, customer concentration, adoption hurdles, and heavy investment requirements threaten Veeva's revenue growth, margin stability, and long-term earnings predictability.

Catalysts

Provides cloud-based software for the life sciences industry in North America, Europe, the Asia Pacific, the Middle East, Africa, and Latin America.

• The resolution of the long-standing dispute with IQVIA removes critical data interoperability barriers, enabling Veeva to fully integrate industry-leading datasets into its Commercial Cloud, which should materially expand its addressable market, improve product adoption across multiple commercial applications, and accelerate top-line revenue growth over the next several years.
  
• Veeva's rapid progress embedding advanced AI agents directly within its Vault platform-across both R&D and Commercial suites-positions it as an essential workflow and automation partner amid the rising complexity of personalized medicine, genomics, and data-driven trials, potentially supporting higher pricing power, platform stickiness, and net margin expansion in the medium to long term.
  
• Deepening adoption of multi-product suites and expansion into adjacent verticals (such as medtech and consumer health), supported by a broadened product portfolio now unencumbered by historical partner restrictions, increases recurring revenue streams and improves earnings predictability.
  
• The digital transformation and cloudification of healthcare workflows continues to be a powerful industry tailwind, with Veeva's role as a system-of-record for life sciences companies further reinforced by strong customer demand, ongoing wins among the top 20 pharma, and increased willingness of large customers (due to greater interoperability with IQVIA) to consolidate more spend with Veeva-positively impacting both revenue growth and gross margin over time.
  
• The integration of Veeva Business Consulting with its technology suite creates a unique change management value proposition for clients undergoing digital and AI-driven process transformations, increasing customer retention, enabling the company to capture a greater share of large enterprise transformation budgets, and thereby supporting long-term revenue and net margin expansion.

Veeva Systems Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Veeva Systems's revenue will grow by 12.8% annually over the next 3 years.
• Analysts assume that profit margins will increase from 27.3% today to 31.3% in 3 years time.
• Analysts expect earnings to reach $1.3 billion (and earnings per share of $7.72) by about September 2028, up from $809.9 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 50.3x on those 2028 earnings, down from 57.2x today. This future PE is lower than the current PE for the US Healthcare Services industry at 57.2x.
• Analysts expect the number of shares outstanding to grow by 1.22% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.82%, as per the Simply Wall St company report.

Veeva Systems Future Earnings Per Share Growth

Risks

• Ongoing resistance to change among customers, particularly evidenced by slow adoption and agentic fatigue, could temper the pace and ultimate success of AI and new product rollouts, limiting long-term revenue growth from anticipated innovation cycles.
  
• The highly competitive landscape-with tech giants like Salesforce, Microsoft, and SAP expanding into verticalized healthcare-raises risk that Veeva's "best of breed" positioning could be challenged, heightening customer churn risk and exerting downward pressure on both recurring revenues and margins.
  
• Veeva's growing dependence on major pharmaceutical customers (e.g., concentration in top 20 accounts on Vault CRM) increases exposure to customer consolidation and bargaining power, making future pricing and renewal rates less predictable and potentially compressing earnings and gross margins.
  
• Persistent macroeconomic uncertainty or constrained biopharma R&D budgets may lead to prolonged deal cycles, increased project lumpiness, and slower-than-expected migration and adoption of core products like Vault CRM, which can negatively affect near and long-term revenue growth.
  
• The significant investments needed for product development, platform expansion (including AI and new commercial cloud products), and market entry into adjacent verticals could fail to deliver targeted ROI; rising R&D and go-to-market expenses without proportional top-line growth would erode net margins and impact future earnings.

Valuation

• The analysts have a consensus price target of $316.714 for Veeva Systems based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $362.0, and the most bearish reporting a price target of just $222.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.3 billion, earnings will come to $1.3 billion, and it would be trading on a PE ratio of 50.3x, assuming you use a discount rate of 7.8%.
• Given the current share price of $282.68, the analyst price target of $316.71 is 10.7% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.