Bank of America Securities analyst Bradley Sills reiterated a Hold rating on Veeva Systems yesterday and set a price target of $304.00.
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Bradley Sills has given his Hold rating due to a combination of factors that balance both positive performance and potential risks for Veeva Systems. The company reported strong second-quarter results with subscription and total revenues exceeding expectations, driven by robust growth across research and development sectors. Additionally, Veeva’s earnings per share surpassed forecasts, supported by revenue strength and operational efficiencies. However, the company’s billings were slightly below street expectations, although management has adjusted the full-year billings guidance upwards, indicating a significant increase in the second half of the year.
Despite these positive outcomes, Sills highlights several risks that justify the Hold rating. There is uncertainty regarding whether Veeva can sustain the accelerated growth implied in the revised billings guidance. Increased competition, particularly from Salesforce in the life sciences sector, poses a threat to Veeva’s pricing and renewal rates. Furthermore, with a high penetration rate among top pharma companies, Veeva faces execution risks in cross-selling additional platform areas to maintain its growth trajectory. These factors contribute to the cautious outlook despite the company’s recent successes.
In another report released yesterday, Evercore ISI also maintained a Hold rating on the stock with a $295.00 price target.