Veeva Systems (VEEV -0.56%) might not be a familiar name to many investors, but this cloud services stock has generated millionaire-making gains since its initial public offering in October 2013. Veeva went public at $20 per share and started trading at $36.70. Its share price is over $320 today.

Investors who don't own Veeva yet might look at those gains, notice it isn't cheap at nearly 80 times forward earnings, and assume its upside potential is limited. But Veeva dominates a high-growth niche within the cloud services market, and it's repeatedly reiterated its long-term growth targets for 2025.

So will Veeva's stock still help you retire a millionaire? Let's review what Veeva does, how fast it's growing, and whether it can generate more multibagger gains over the next decade.

Three medical professionals looking at a tablet.

Image source: Getty Images.

What does Veeva do?

Veeva's co-founder and CEO, Peter Gassner, was previously's (CRM 0.58%) senior VP of technology. Gassner noticed that life science companies needed more specialized cloud-based customer relationship management (CRM) services than the ones Salesforce offered, and co-founded Veeva with Matt Wallach to satisfy that unmet demand.

Veeva's cloud-based platform consists of two main ecosystems: Veeva Commercial Cloud, which primarily provides CRM and analytics services; and Veeva Vault, a suite of cloud-based enterprise applications that help companies keep track of clinical trials, industry regulations, and other data.

How fast is Veeva growing?

When Veeva went public eight years ago, it served 170 life science customers. Last quarter, it served more than 1,000 customers, including pharmaceutical giants like GlaxoSmithKline, Novartis, and Merck.

Between fiscal 2014 (which ended in January 2014) and fiscal 2021, Veeva's revenue rose from $210 million to $1.47 billion, representing a compound annual growth rate (CAGR) of 32%. During the same period, its non-GAAP net income increased at a CAGR of 48.3% from $30 million to $473 million.

A medical researcher examines a capsule.

Image source: Getty Images.

Unlike many other cloud companies, Veeva has remained profitable on a GAAP basis. Its GAAP net income rose at a CAGR of 48.4% from $24 million in fiscal 2014 to $380 million in fiscal 2021.

Veeva's margins expanded over those seven years. Between fiscal 2014 and 2021, its non-GAAP gross margin rose from 61.9% to 74.7%, while its non-GAAP operating margin increased from 22.2% to 39.8%.

Veeva generated such consistent growth for two simple reasons. First, it established a first-mover advantage in its niche market and didn't face any meaningful competitors. As a result, it gained plenty of pricing power and the ability to cross-sell additional services to its existing customers. That strength is reflected in its high revenue retention rate of 124% in fiscal 2021, in line with its 121% rate in fiscal 2020 and 122% rate in fiscal 2019.

Second, intense competition between life science companies fuels constant demand for Veeva's services. These companies need to be on the same page in terms of clinical trials and regulations, and they need to run their customer support and sales teams as efficiently as their industry peers. 

How much larger could Veeva grow?

Veeva expects to more than double its annual revenue to $3 billion in calendar 2025 (which includes most of fiscal 2026). That forecast implies its revenue will grow at a CAGR of 15.3% between fiscal 2021 and 2026.

If it can maintain that CAGR for another five years, it could more than double its revenue to more than $6 billion by fiscal 2031. If investors continue to pay a premium for Veeva's growth, its stock could easily triple or quadruple within the next decade.

Could Veeva be a millionaire-making stock?

Whether or not Veeva generates millionaire-making returns depends on the size of your investment. It could certainly turn a $250,000 investment into over $1 million within 10 years, but a smaller investment would likely fall short of that goal.

Veeva's still a great growth stock, but investors who expect more explosive multibagger gains might be a bit disappointed. Instead, investors should have realistic expectations for Veeva and understand that it provides a rare balance of stable growth, profitability, and value in the high-growth cloud sector.