Veeva Systems Inc. (NYSE:VEEV) stock isn't too far away from doubling in 2018, with over three months remaining in the year. Shares of the life sciences cloud solutions provider are at all-time highs with no end in sight to its momentum.

But is Veeva Systems still a buy? As you might expect with a stock that skyrocketed so much so quickly, there are arguments both for and against Veeva.

Doctor pointing to cloud icon next to healthcare icons.

Image source: Getty Images.

Viva Veeva

The strongest case for buying Veeva Systems is that the company's long-term growth prospects remain very good. Like a sports team, businesses have to play both offense and defense. Veeva looks great on both fronts.

Veeva's primary market has been and continues to be the life sciences industry, with a special focus on drugmakers. However, the company is making nice progress in expanding beyond this core market. Veeva Systems CEO Peter Gassner noted in the company's Q2 earnings call that the company now has its "first seven-figure customer" outside of life sciences.

Granted, it's still early for Veeva's foray into new industries. However, investors shouldn't ignore the potential for the company to establish a solid customer base outside of life sciences and then continue to grow its market share.

The picture also looks really good for Veeva in its core market. The company's newer products, including its electronic data capture (EDC) system for gathering clinical trials data electronically rather than via paper, provide a great opportunity for growth. As my Fool colleague Brian Stoffel noted recently, Veeva could also rejuvenate growth from its flagship customer relationship management (CRM) applications with its Nitro next-generation commercial data warehouse. 

In addition, Veeva continues to be in a great position to hold onto its existing customers -- the equivalent of playing defense. The more new tools like Nitro that the company introduces, the "stickier" Veeva's products become to customers. Of course, even without new products, the costs and headaches of switching to another provider help boost Veeva's customer retention rates.

Hold the hoorays?

Probably no one would question Veeva's enviable position atop the cloud solutions market in the life sciences industry. However, probably no one would question that Veeva stock also trades at a steep premium.

Veeva's shares currently trade at more than 100 times trailing-12-month earnings and at more than 61 times expected earnings. Those are nosebleed levels, for sure. Often when a stock has such a lofty valuation, supporters of the stock can point to growth prospects that make the valuation appear to be more attractive. But Veeva's price-to-earnings-to-growth (PEG) ratio of 3.56 is also really high. 

In large part because of this sky-high valuation, Wall Street analysts aren't all that positive about Veeva's near-term prospects. The consensus one-year price target for Veeva is 6% below the current share price. Nearly half of the analysts covering Veeva rate it as a stock to hold rather than as one to buy.

There's also the reality that stocks with high earnings multiples often feel the brunt of an overall market pullback more than more attractively valued stocks do. The current bull market is getting to be very long in the tooth. My fellow Motley Fool contributor Sean Williams wrote a few weeks ago about several signs that a recession is closer than you might realize. If a recession comes, Veeva could fall -- and fall hard.

To buy or not to buy

If you're focused only on the short term and are afraid of a significant market pullback, staying away from Veeva might make sense. However, for long-term investors, I think that Veeva remains a good pick even at its premium valuation.

It's important to keep in mind that Veeva's shares have traded at even higher earnings multiples in the past and the stock still moved higher. Investors should also realize that Wall Street analysts tend to focus more on the near term than the long term.

Few stocks enjoy the kind of competitive advantages that Veeva does in the life sciences industry. The potential for the company to expand into other industries beyond life sciences is icing on the cake. Although Veeva could be volatile because of its valuation, the future for this high-flying stock appears to be as bright as ever.