Shares of Veeva Systems (VEEV +15.20%) charged sharply higher today, climbing as much as 20.9%. As of 1:36 p.m. ET, the stock was still up 16.1%.
The catalyst that sent the software-as-a-service (SaaS) and cloud specialist higher was quarterly results that were far more bullish than investors had anticipated.
Image source: The Motley Fool.
What Saas-pocalypse?
The popular narrative in recent months has been that artificial intelligence (AI) would effectively make software obsolete, but investors have begun to understand that the reality is far different. The evidence is clear in the company's results.
For its fiscal 2027 second quarter (ended July 31), Veeva generated revenue that climbed 18% year over year to $928 million. The results were driven higher by subscription revenue that rose 16% to $767 million. Profitability was equally robust, with adjusted earnings per share (EPS) of $2.35, up 18%.
For context, analysts' consensus estimates called for revenue of $905 million and adjusted EPS of $2.22, so Veeva cleared both hurdles by a wide margin.
NYSE: VEEV
Key Data Points
Veeva's foray into AI is ongoing, as the company continues to roll out industry-specific applications and agents for the life sciences space. Management noted that its Vault Customer Relationship Management (CRM) continued to add top biopharmaceutical companies to its rolls, while its Vault AI and Falcon platforms were gaining converts and growing quickly.
In the wake of Veeva's better-than-expected quarter, management increased its fiscal 2027 full-year outlook. The company is now forecasting total revenue of $3.69 billion and adjusted EPS of $9.21, both at the midpoint of its guidance. That's up from its previous outlook for revenue of $3.64 billion and adjusted EPS of $9.05, issued just three months ago.
Veeva Systems stock isn't the screaming bargain it was just a few months ago, but it's still attractively priced at 31 times forward earnings.
