We came across a bullish thesis on Veeva Systems Inc. (VEEV) on Substack by Francesco Ferrari. In this article, we will summarize the bulls’ thesis on VEEV. Veeva Systems Inc. (VEEV)'s share was trading at $239.64 as of March 10^th. VEEV’s trailing and forward P/E were 55.47 and 32.79 respectively according to Yahoo Finance.

A technician recording data from a complex experiment involving pharmaceutical products.

Veeva Systems (VEEV) is a cloud software provider specializing in the life sciences industry, serving pharmaceutical and biotech companies in managing research, sales, and compliance. With a $39.4 billion market cap, Veeva has built a highly resilient business model, driven by its 83% Annual Recurring Revenue (ARR), which ensures a steady and predictable cash flow. This high ARR reflects the company’s deeply embedded solutions and strong customer retention.

Veeva has consistently delivered strong financial performance, with a three-year revenue CAGR of 14.1%, supported by robust 74.5% gross margins and an impressive free cash flow margin of 38.9%. Its return on invested capital (ROIC) stands at 25.7%, showcasing the company’s efficiency in deploying capital to generate returns. Additionally, Veeva’s balance sheet is exceptionally strong, with a net cash position of $5 billion, further enhancing its financial stability. The stock maintains a low beta of 0.88, making it less volatile than the broader market.

With its high-margin recurring revenue model, and strong financial foundation, Veeva stands out as a high-quality investment in the cloud software space. Its resilience and growth potential make it a compelling company to monitor, particularly in periods of market uncertainty.

Veeva Systems Inc. (VEEV) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held VEEV at the end of the third quarter which was 48 in the previous quarter. While we acknowledge the risk and potential of VEEV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VEEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.