Veeva Systems (NYSE:VEEV) and Zendesk (NYSE:ZEN) have both been resilient stocks throughout the COVID-19 crisis. Demand for Veeva's life science cloud services accelerated as drugmakers tracked more customer relationships, clinical trial data, and other information on its platform.

Zendesk's cloud-based platform, which provides customer service tools via phone, email, chat, and social media networks, also saw stable demand as companies increasingly relied on online channels. Let's see which company is better poised for growth throughout the rest of the year.

An illustration of cloud computing services.

Image source: Getty Images.

How do Veeva and Zendesk make money?

Veeva has a first mover's advantage in its niche market, and its list of over 600 customers include top drugmakers like GlaxoSmithKline and Novartis. Veeva was co-founded by Peter Gassner, Salesforce's former senior VP of technology, and its services still run on Salesforce's cloud services.

Veeva's core products include the Veeva CRM (customer relationship management) platform; the Veeva Vault, which stores clinical data; and the Commercial Cloud, which includes the events management platform Physicians World and the patient analytics platform Crossix. Veeva generated 80% of its revenue from higher-margin subscription services last quarter, while the rest came from its lower-margin "professional services and other" segment.

Zendesk provides cloud-based CRM services to over 160,000 customers across a wide range of industries worldwide. Two years ago, it launched Zendesk Suite, an omnichannel platform that bundles multiple services into single subscriptions.

Over the past year, it bundled together its Sell and Support services into the Zendesk Duet platform, and launched two additional omnichannel subscription services -- the Zendesk Support Suite and Zendesk Sell Suite -- to further streamline its offerings. It generates all its revenue from these subscriptions.

How fast are Veeva and Zendesk growing?

Veeva's revenue rose 28% to $1.1 billion in fiscal 2020, which ended on Jan. 31, as its net income grew 31% to $301.1 million. On a non-GAAP basis, which excludes stock-based compensation and other variable expenses, its net income rose 36% to $347.4 million.

A physician access medical information on a tablet.

Image source: Getty Images.

Veeva expects is revenue to rise 25%-26% annually this year, and for its non-GAAP EPS to grow 14%-16%. It also recently reiterated its long-term goal of generating $3 billion in annual revenue by fiscal 2025.

The COVID-19 crisis isn't a meaningful headwind for Veeva -- it slightly affected Physicians World and Crossix with the cancellation of in-person events and online ad purchases, but those declines were easily offset by stable demand across the life sciences industry.

Zendesk's revenue rose 36% to $816.4 million in fiscal 2019, which aligns with the calendar year. However, its net loss widened from $131.1 million to $169.7 million. On a non-GAAP basis, its net profit surged 123% to $36.8 million.

Zendesk's revenue rose 31% annually in the first quarter, and it projects 22%-25% growth in the second quarter. However, it withdrew its prior full-year guidance, which previously called for 29%-31% revenue growth, citing uncertainties caused by COVID-19 headwinds.

Therefore, Zendesk doesn't seem certain the growth of its stronger customers -- including those in the e-commerce, online learning, remote conferencing, and software industries -- will offset the weakness of its struggling clients across the travel, hospitality, retail, and ride-sharing markets.

The valuations and verdict

Veeva and Zendesk are both trading at premium valuations. Veeva has a forward P/E of 85, while Zendesk trades at nearly 190 times forward earnings.

However, Veeva's first mover's advantage, lack of direct competitors, and stable profitability arguably justify that premium. Meanwhile, Zendesk faces tougher competitors and generates weaker bottom line growth, and its exposure to a broader range of sectors is less appealing than Veeva's dedicated focus on life science companies.

Therefore, Veeva is easily a better buy than Zendesk right now, even if its stock is hovering near all-time highs in this unpredictable market.