Veeva Systems is Thursday's IBD Stock Of The Day as shares trade inside a flat base ahead of its looming — and highly anticipated — divorce from Salesforce.
Pleasanton, Calif.-based Veeva provides cloud-based software for the life sciences industry. Its offerings help streamline operations and data management for pharma and medtech companies in a highly regulated area. When Veeva was initially created, its first software was built using the Salesforce platform.
That will end in September.
Insurance underwriter Everest Group says the separation offers a unique opportunity for both companies. When the split goes through, Veeva will move its Salesforce-hosted Veeva CRM to its own Veeva Vault platform. Salesforce is currently bulking up its life sciences offerings.
"Enterprises also can now expect products from both Veeva and Salesforce in the MedTech and pharmaceutical spaces, so life sciences customers can plan out which product they want to run with," Everest Group wrote in a February 2023 blog post.
Veeva Stock: The Salesforce Split
The separation gives Veeva a chance to offer customers a better experience. Veeva will be able to integrate all its solutions across the Veeva Vault platform while optimizing costs. The company has an ambitious goal of topping $3 billion in sales this year, recently guiding to $3.09 billion to $3.1 billion in sales for the fiscal year ending on Jan. 31, 2026.
Splitting off from the Salesforce partnership will allow Veeva to focus more deeply on medtech.
"MedTech, although a much smaller part of the overall life sciences CRM (customer relationship management) pie, is touted to grow much faster than other domains," Everest wrote. "This can be a potential growth engine for Veeva to achieve its goals."
But Salesforce isn't taking the coming rivalry lying down. During an event in June 2024, the Fortune 500 company highlighted its new Life Sciences Cloud, KeyBanc Capital Markets analyst Scott Schoenhaus said in a report at the time.
"It was clear to us that Salesforce is just 'dipping its toes' in the clinical side but we expect it will ultimately expand its offering in this space in tandem with its commercial offering," he said. "While we believe converting legacy pharma clients that are on the VEEV platform might be an uphill battle, it was clear Salesforce was heavily investing in both its commercial and clinical platforms to do so."
Crossix Helps Drive First-Quarter Sales
Beyond the Salesforce split, investors in Veeva stock are also closely watching the Crossix acquisition. Veeva acquired Crossix in 2019. The platform provides health care market analytics. In the fiscal first quarter, reported in May, Veeva noted growth for its core CRM platform and Crossix.
Veeva Systems also added 28 new Vault CRM customers and expects roughly 200 by next year, KeyBanc's Schoenhaus said. That would climb from more than 80 now. The company also expects most of the top 20 pharmaceutical companies to switch to Veeva Vault by the end of the current fiscal year.
He raised his price target on Veeva stock to 285 from 250, and kept his overweight rating.
The Street will focus on the regulatory environment and a potential slowdown in clinical trials amid funding cuts at the National Institutes of Health. Guidance for fiscal year 2026 suggests "continued pressure on services growth," CFRA analyst Daniel Rich said in a client note. Subscriptions are also projected to slow to about 13% annual growth.
Rich has a hold rating on Veeva stock.
Highly Rated Stock
Veeva Systems has yet to announce a date for its fiscal second-quarter earnings release. Analysts call for adjusted earnings of $1.90 per share and $768 million in sales. Earnings would increase more than 17% as sales jump almost 14%.
Shares have a best-possible IBD Digital Composite Rating of 99. This means Veeva stock ranks in the top 1% of all stocks when it comes to fundamental and technical measures. Shares also have a strong Relative Strength Rating of 89.
Promisingly, Veeva stock is trading above a buy zone and its key moving averages. Shares broke out of a consolidation with a buy point at 258.93 on May 29 following its fiscal first-quarter report. On the weekly chart, shares are forming a flat base with an entry at 291.69, MarketSurge shows.
Veeva stock also ranks No. 37 on the IBD 50 list of elite growth stocks.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
