What happened

Investors in Veeva Systems (NYSE:VEEV) are enjoying a pleasant end to the trading week. Shares were up 12% as of 3:40 p.m. EDT on Friday, thanks to the release of better-than-expected fiscal 2019 second-quarter earnings.

So what

Veeva's headline numbers were pleasing across the board:

  • Revenue jumped 25% to $209.6 million. This figure was better than management's guidance.
  • Non-GAAP (generally accepted accounting principles) earnings per share grew 63% to $0.39. This was $0.06 better than what management had predicted, and a nickel ahead of Wall Street's estimates.
Doctor using a laptop

Image source: Getty Images.

Management also expects the good times to continue into the fiscal third quarter. Revenue is expected to grow 22% to about $203.5 million. And management is predicting non-GAAP earnings-per-share growth of about 52%. 

The picture continues to look good for the full year, so management boosted its guidance yet again. The company now expects revenue to grow 21% to $828 million. Non-GAAP EPS is expected to grow 47% to $1.37 per share.

Given the beat-and-raise quarter, it's not hard to figure out why investors are having a good day.

Now what

Veeva's impressive growth rates have been translating into shareholder gains all year long. Including today's jump, shares are up an impressive 82% since the start of the year.

Growth investors might be wondering if the stock is starting to get ahead of itself. With shares currently trading for 20 times sales and 63 times next year's earnings, that's a valid concern.

However, my view is that Veeva Systems is doing something really special, and still has a long growth runway ahead. Great businesses like this are few and far between, so if you can buy Veeva's stock with a long-term mindset, I wouldn't suggest you place too much emphasis on the stretched valuation.

Editor's note: An earlier version of this article contained an incorrect number for management's estimate for Q3 EPS.