Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Veeva Systems Stock Soared 38% in August

By Beth McKenna - Sep 6, 2018 at 7:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the cloud solutions provider for the life sciences industry continued their upward climb last month. Here's what investors should know.

What happened

Shares of Veeva Systems ( VEEV -6.67% ) rocketed 38% in August, according to data from S&P Global Market Intelligence. This brings the life sciences industry-focused, cloud-based software solutions provider's year-to-date 2018 return to 82.7% through Wednesday, Sept. 5.

For some context, the S&P 500 returned 3.3% last month and has returned 9.5% so far this year.

A lab worker's hands holding a beaker with some liquid in it that's sitting on a table along with other beakers and test tubes.

Image source: Getty Images.

So what

We can attribute Veeva Systems stock's powerful August performance to a continuation of the momentum it's had for some time as more investors discover the fast-growing company that went public in late 2013, along with the company's release of strong second-quarter 2018 results on Aug. 23. 

For the quarter, Veeva Systems' revenue jumped 25% year over year to $209.6 million, with subscription services' revenue increasing 25% to $169.6 million. GAAP earnings per share (EPS) increased 28% to $0.32, and EPS adjusted for one-time factors surged 63% to $0.39, handily beating the $0.34 that Wall Street was expecting.

Now what

For the third quarter, management expects revenue of $215 million to $216 million, which, at the midpoint, translates to year-over-year growth of 22%. Management guided for adjusted EPS of $0.38, which translates to year-over-year growth of 52%.

Veeva Systems stock is worth putting on your watch list if you don't already own it. The company is focused on rolling out new products for its core life sciences market, which is huge, and has also been scoring wins outside of this core focus. Shares are pricey -- trading at 97-times trailing-12-month earnings and 58-times projected forward earnings -- but we'd expect that of a company with its robust growth dynamics and long-term growth potential.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Veeva Systems Inc. Stock Quote
Veeva Systems Inc.
VEEV
$253.97 (-6.67%) $-18.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
635%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.