Piper Sandler’s Top Technical Stock Picks: 20 Best Stocks

4. Veeva Systems Inc. (NYSE:VEEV)

Number of Hedge Fund Holders In Q2 2024: 50

Veeva Systems Inc. (NYSE:VEEV) is a specialty cloud software provider that caters to the needs of the life sciences industry. Its software enables pharmaceutical and biotechnology companies to manage regulatory requirements and customer relations among other operations. Since it is a software as a service (SaaS) provider, Veeva Systems Inc. (NYSE:VEEV)’s narrative depends on its ability to grow revenue, manage costs, and land contracts for recurring revenue. Consequently, the firm’s shares tanked by 15.6% in late May and early June after Veeva Systems Inc. (NYSE:VEEV)’s first quarter earnings saw it reduce revenue guidance by $30 million and reduced R&D spending by 1.5%. Piper Sandler increased its share price target for the life sciences SaaS provider to $230 from $224 in August and kept an Overweight rating on the shares. The optimism was based on insights into Veeva Systems Inc. (NYSE:VEEV)’s deal pipeline with major customers. Overall, while the firm has struggled in a tight economy constrained by rates, it is one of the biggest specialty software providers of its kind and can see tailwinds once economic conditions improve.

Ensemble Capital mentioned Veeva Systems Inc. (NYSE:VEEV) in its Q2 2024 investor letter. Here is what the fund said:

“The broad adoption of Veeva’s software reflects customers’ need to be more efficient. Veeva has over 1,400 customers and its software has been used by 47 of the top 50 biopharma companies like Ely Lilly, emerging biotechs like Replimune, medical device firms like Boston Scientific, and CROs like ICON that run outsourced clinical trials. Its revenue has become more diversified as a result, with the top 10 customers accounting for 28% of revenue in fiscal 2024, down from 61% in fiscal 2012. It has also expanded internationally with 59% of revenue from North America, 28% Europe and Other, 11% Asia Pacific, and 3% the Rest of World in fiscal 2024.

The majority, 94%, of Veeva’s revenue comes from biopharma customers, 4% medtech and 2% consumer products as of fiscal 2q24. Of its biopharma revenue, 66% comes from large enterprises, 25% small medium businesses (SMBs), 4% emerging biotechs and 5% CROs. While Veeva counts most large biopharma companies as its customers, it has many more products left to sell them, and further to penetrate SMBs and emerging biotechs. Veeva recently launched Vault Basics, a low-cost, easy-to-deploy software package that offers smaller companies a chance to expand.”