What happened
Shares of Veeva Systems (VEEV -0.29%) jumped 22.1% in January, according to data from S&P Global Market Intelligence. They're up 5.6% this month through Feb. 8 and have gained a whopping 112% over the last year.
Veeva provides cloud-based software solutions primarily for the life-sciences industry.
For context, the S&P 500 returned 8% last month, is essentially flat so far in February -- up 0.2%, to be exact -- and has returned 7% for the one-year period through Feb. 8.
Image source: Getty Images.
So what
On Jan. 8, Veeva Systems announced that it was ranked as "the second fastest-growing enterprise software company on Fortune magazine's 100 Fastest-Growing Companies list and one of the fastest-growing software companies in Deloitte's 2018 Technology Fast 500 survey." The company didn't release any other notable news in January or very late December, nor was it the specific subject of any other material news during this period.
Veeva stock only moved slightly higher on Jan. 8 and Jan. 9, but it's possible the company's appearance on these lists drew increased attention to it, resulting in some new investors buying shares throughout the rest of the month and/or some existing investors purchasing more shares. This increased demand would support a price rise.
That said, we can probably attribute the bulk of Veeva Systems stock's strong performance last month largely to general market dynamics. Just as highly valued growth stocks were particularly hard hit during the market correction in the last three months of last year, they were largely outperformers in January, when the market came roaring back.
Check out the latest Veeva earnings call transcript.
Now what
Investors should be getting some material news soon, as Veeva Systems is scheduled to report its fiscal fourth-quarter and full-year 2019 results for the period ended Jan. 31 after the market close on Tuesday, Feb. 26. For the quarter, Wall Street is looking for revenue to grow 22.7% year over year to $226.9 million and adjusted earnings per share (EPS) to surge nearly 74% to $0.40. Veeva has surpassed the Street's earning estimates in each of the first three quarters of its fiscal year, so there seems to be a solid chance that it will turn its hat trick into a hat trick plus one.
Reiterating what I wrote in mid-November, when the stock was trading at $89.72 per share (it closed at $115.21 on Feb. 8 for a 28.4% gain in three months, whereas the S&P 500 was flat over this period):
Veeva Systems stock is worth putting on your watchlist if you don't already own it. The company is growing at a fast clip and still has plenty of growth opportunities within its core life sciences market and in other markets into which it's been expanding, such as cosmetics.
Shares are trading at 64.7 times projected forward earnings, but one would expect to have to pay up for shares of a quality company with a potentially long runway for growth ahead of it.
