What happened
Earlier this week, Veeva Systems (VEEV 3.22%) notched beats on both the top and bottom lines in its second quarter. Hooray!
But investors weren't breaking out the party favors and Champagne, as the company's guidance wasn't inspiring, and a clutch of analysts cut their price targets largely based on those fundamentals. According to data compiled by S&P Global Market Intelligence, Veeva's stock suffered a nearly 18% decline over this week.
So what
It's a truism that stocks nearly always trade on future expectations, not past glories. That was the theme of the Veeva sell-off, because the company actually did pretty well during the reported period. Its year-over-year revenue growth clocked in at 17%, with non-GAAP (adjusted) net earnings climbing by 10%. Both headline figures were a bit higher than the collective analyst estimates.
On the flip side, Veeva's guidance was considered weak. What's more its revenue projection was lowered from the previous forecast.
The healthcare industry cloud-computing specialist now anticipates that the top line will expand by 16% this year, down slightly from the preceding expectation of 17%. In slightly better news, Veeva left its per-share earnings estimate intact; this line is still anticipated to rise by 12%.
NYSE: VEEV
Key Data Points
Now what
On the back of those results, analysts fell over themselves reducing their price targets on Veeva stock (although, notably, none downgraded his or her recommendation). One was Canaccord Genuity's David Hynes, who sliced his from $200 per share to $185. Hynes emphasized that slowing growth rate and said the company's high profit margins don't leave a great amount of room for improvement, among other concerns.
