Shares of Veeva (NYSE:VEEV) have rallied about 40% this year, as the healthcare cloud services provider topped first-quarter analyst estimates with robust sales and earnings growth. Its revenue rose 22% annually to $195.5 million, beating estimates by $6.6 million. Its non-GAAP net earnings grew 43% to $0.33 per share, exceeding expectations by $0.02.

Veeva also raised its full-year sales guidance from $815 million-$820 million to $826 million-$830 million, implying 21% sales growth at the midpoint. Analysts had expected just 19% growth. It also hiked its EPS guidance from $1.30-$1.33 to $1.36-$1.38, which represents 47% growth at the midpoint and surpasses the consensus forecast for 42% growth.

Hexagonal shapes with healthcare icons on them

Image source: Getty Images.

Those are great growth figures, but Veeva's stock isn't cheap. At $77, it trades at 56 times this year's earnings. However, I think that Veeva could still be a great long-term growth play for four simple reasons.

1. Its first-mover advantage

Veeva provides cloud-based customer relationship management (CRM) services for healthcare companies. Its core products include the Veeva Vault, which tracks prescribing habits, clinical trials, and industry regulations; and the Veeva Commercial Cloud, which helps drug companies maintain customer relationships.

Veeva's services are useful for drug companies and healthcare providers, since they provide an updated database of information that can be used to produce or prescribe drugs. It also recently launched Veeva Nitro, a next-gen commercial data warehouse specifically designed for life science needs. Nitro leverages artificial intelligence (AI) technologies to help companies efficiently organize and analyze their stored data.

Veeva entered the cloud healthcare market over a decade ago, giving it a first-mover advantage, which enabled it to accumulate over 625 customers, including pharmaceutical giants GlaxoSmithKline, Novartis, and AstraZeneca. Those massive customers won't suddenly move their data to a more diversified platform like salesforce.com's (NYSE:CRM) Health Cloud.

2. Salesforce is more of a partner than a rival

Salesforce's Health Cloud offers some services similar to Veeva's, but the two platforms aren't direct competitors. Salesforce focuses more on patient care and personalized medicine instead of clinical trials and pharmaceutical companies.

Veeva founder and CEO Peter Gassner was previously senior VP of technology at Salesforce, and Veeva's platform is actually built on Salesforce's CRM platform and integrated into its marketing and service clouds.

The bears often claim that Salesforce could develop a Veeva-like service of its own, but that would be an odd move, since the two companies' partnership is mutually beneficial, and Salesforce would likely struggle to convert Veeva's well-established customer base.

3. A massive growth market

Demand for real-time healthcare industry data should continue rising over the next few years. Research and Markets expects the healthcare cloud computing market to grow from $20.2 billion in 2017 to $35 billion by 2022 at a compound annual growth rate of 11.6%.

This indicates that Veeva has room to run, and that there's likely enough room in this expanding market for multiple providers to thrive.

A man wearing a suit holds a tablet with a hovering cloud icon.

Image source: Getty Images.

4. Solid profit growth

Unlike many high-growth cloud companies, Veeva is consistently profitable by both non-GAAP and GAAP standards. Its GAAP net income rose 20% annually to $37 million last quarter, while its non-GAAP net income jumped 50% to $51.4 million.

Veeva achieves that stable profit growth by keeping close tabs on its operating expenses, which climbed 27% annually last quarter but only accounted for 47% of its total revenue. Its stock-based compensation expenses -- often a sore spot for high-growth tech companies -- used up just 9% of its revenue, compared to 7% a year earlier.

Veeva's non-GAAP and GAAP gross margins both hover near 70%, with higher subscription margins mostly offsetting minor declines in professional service margins. Veeva maintains those high margins and generates stable profits because it dominates a niche market and has no direct competition.

By comparison, other cloud service companies often flounder as they engage rivals in price wars and fund expanding sales forces with higher stock bonuses.

Investor takeaway

Veeva isn't a stock for queasy investors. However, I believe that it's a solid long-term investment in the growing healthcare cloud market. It has a wide moat, a growing customer base of industry leaders, and an expanding ecosystem for cross-selling services -- all topped off with rock-solid profit growth.

Leo Sun owns shares of GlaxoSmithKline. The Motley Fool owns shares of and recommends Salesforce.com and Veeva Systems. The Motley Fool has a disclosure policy.