High Valuation and CRM Transition Risks Drive Sell Rating on Veeva Systems

Morgan Stanley analyst Craig Hettenbach maintained a Sell rating on Veeva Systems today and set a price target of $222.00.

Craig Hettenbach has given his Sell rating due to a combination of factors tied to Veeva Systems’ fundamentals and risk profile. He notes that although the company has a very strong balance sheet and a sizeable $2 billion share repurchase authorization, the stock still trades at a premium valuation that leaves little tolerance for execution missteps. This elevated multiple is particularly concerning in light of the company’s recent share price underperformance, suggesting that the upside from the buyback may be more tactical than structural. In addition, the slow pace of acquisitions raises questions about Veeva’s ability to deploy its large cash balance in ways that will drive long‑term earnings growth.

Hettenbach also highlights strategic uncertainties that could weigh on future performance, including the ongoing migration to Vault CRM and intensifying competition from Salesforce. The loss or potential loss of major CRM customers such as Pfizer, AbbVie, AstraZeneca, and Novartis introduces visibility risk to revenue beyond FY27, particularly into FY28 and FY29. He underscores that forthcoming guidance and updates on customer churn will be key, but for now, the combination of competitive pressure, customer transition risk, and high valuation skews the risk/reward profile to the downside. As a result, despite the near‑term support from the buyback, he concludes that the stock does not offer an attractive entry point at current levels, justifying a Sell rating.

According to TipRanks, Hettenbach is a 4-star analyst with an average return of 3.8% and a 55.20% success rate.