Veeva Systems Inc. VEEV is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by a solid fourth-quarter fiscal 2025 performance and strategic deals, is expected to contribute further. However, rising operational costs remain a cause for concern.

This Zacks Rank #1 (Strong Buy) company’s shares have risen 4.9% in the year-to-date period against the 1.6% decline of the industry. The S&P 500 Composite has decreased 8.9% during the said time frame.

The renowned provider of cloud-based software applications and data solutions for the life sciences industry has a market capitalization of $35.88 billion. The company anticipates 26.2% growth for the next five years and expects to maintain its strong performance in the future. It delivered a trailing four-quarter average earnings surprise of 7.92%.

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Reasons Favoring VEEV’s Growth

Robust Product Portfolio: Veeva continues to drive the migration to its next-gen Vault CRM, with 20 new customers adopting the solution in the fourth quarter, particularly small and mid-sized biotech firms preparing for commercial launches. The company expects most top 20 pharma firms to make migration decisions by fiscal 2026, ahead of the 2030 sunset of the legacy CRM.

Veeva has introduced AI-driven innovations like CRM Voice Control, CRM Bot and MLR Bot to enhance efficiency, compliance and automation. Meanwhile, its Clinical Development Cloud sees growing adoption, with 17 of the top 20 pharma companies using its CTMS and a ninth committing to its EDC solution. Investments in RTSM and eCOA further expand its market opportunities.

Veeva’s Data Cloud solutions—Compass, OpenData, Link, and the new Pulse—are gaining momentum. Compass supports over 100 brands, and Pulse secured its first seven-figure deal to enhance pharma segmentation and targeting. While enterprise-wide licensing is still in the early stages, larger contracts are expected. Veeva is also expanding its Safety suite, offering a fully cloud-based solution for signal detection, adverse event reporting, and regulatory compliance, with automated updates and seamless clinical integration.

Strategic Deals: Veeva has secured several key deals in recent months, including Boehringer Ingelheim's commitment to migrate to Veeva Vault CRM, expanding its use of Veeva Commercial Cloud and Development Cloud. Additionally, ACTO joined the Veeva AI Partner Program to enhance generative AI capabilities for field representatives in life sciences. In October, Veeva and Walgreens Boots Alliance announced a long-term partnership to leverage the former’s Data Cloud and Clinical Platform, aiming to improve patient outcomes by connecting the latter’s community locations with diverse patient populations for easier clinical research access.

Strong Q4 Results: Veeva exited the third quarter of fiscal 2025 with better-than-expected results, wherein both earnings and revenues beat their respective consensus estimate. This uptick in both top and bottom lines and robust performance by the Subscription services segment during the quarter were impressive. The rise in Professional services and others revenues also bodes well.

Per management, Veeva Systems had a strong finish to the year by strengthening its partnerships across all customer segments, from large biopharma companies to smaller biotech firms.

A Factor That May Offset the Gains of VEEV

Rising Costs: Veeva Systems has been experiencing rising operating costs over the past few months. General and administrative expenses for the fourth quarter of fiscal 2025 increased 20.6% year over year. Management expects sales and marketing expenses to increase in fiscal 2025, primarily due to employee-related expenses as the company raises its headcount to support sales and marketing efforts associated with product offerings and the continued expansion of sales capacity across all solutions.

In the fiscal fourth quarter, the total operating expenses increased 9.3% year over year. Veeva Systems expects operating expenses to increase in fiscal 2025, primarily due to employee compensation-related costs. 

Estimate Trend

Veeva Systems is witnessing a positive estimate revision trend for fiscal 2026. In the past 30 days, the Zacks Consensus Estimate for fiscal 2026 earnings per share (EPS) has moved 4 cents north to $7.30.

The Zacks Consensus Estimate for first-quarter fiscal 2026 revenues is pegged at $727.9 million, indicating an 11.9% improvement from the year-ago quarter’s reported number. The EPS estimate for the first quarter of fiscal 2026 is pinned at $1.74, implying a 16% improvement year over year.

Other Key Picks

Some other top-ranked stocks from the same medical industry are Fresenius Medical Care FMS, Masimo MASI and Glaukos GKOS.

Fresenius Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 28.9% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

FMS’ earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 15.67%. The company is expected to release first-quarter results next month.

FMS’ shares have gained 6% so far this year.

Masimo, sporting a Zacks Rank of 1 at present, has an estimated growth rate of 20% for 2025.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 14.41%. Its shares have risen 58.5% compared with the industry’s 3.9% growth year to date. The company is expected to release first-quarter results in May.

MASI’s shares have lost 8% so far this year.

Glaukos, carrying a Zacks Rank #2 (Buy) at present, has an estimated earnings growth rate of 48.9% for 2025. It delivered a trailing four-quarter average earnings surprise of 8.11%. The company’s earnings beat estimates in two of the trailing four quarters, met in one and missed in the other, delivering an average surprise of 8.11%. The company is expected to release first-quarter results on April 30.

GKOS’ shares have plunged 40.1% so far this year.

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This article originally published on Zacks Investment Research (zacks.com).

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