Veeva Systems is Monday's pick for IBD 50 Growth Stocks To Watch as the software maker said it has expanded its partnership with Dow Jones component Merck. Veeva stock formed a new base after an explosive move following its latest earnings report in late May.
Veeva Systems is ending its relationship with another Dow Jones index name, Salesforce, in September. Veeva stock is inching up modestly Monday.
IBD 50 stock Veeva Systems provides cloud-based software for the life sciences industry. Veeva serves more than 1,000 customers, ranging from large biopharmaceutical companies to emerging biotech names.
Veeva was a spinoff from customer relationship management software developer Salesforce, therefore initially used the Salesforce CRM platform. Veeva built its Vault CRM application allowing it to be independent of Salesforce. Its products are used in medical, safety, regulatory, data, and artificial intelligence services.
In November 2022, Veeva announced a 10-year strategic partnership agreement with Merck. On Monday, Veeva said Merck committed to Veeva Vault CRM.
"We share a deep commitment to customer success, and Vault CRM will provide Merck the technology foundation to drive commercial execution," Merck Executive Vice President Dave Williams said Monday.
Veeva Systems has six commitments to its Vault CRM, including the Merck agreement and Bayer, according to an Oppenheimer Company Update on Veeva.
In June, Veeva expanded its relationship with Amazon.com's Amazon Web Services. Veeva uses AWS cloud infrastructure for its Veeva Vault CRM Suite.
Veeva ranks No. 1 out of 27 stocks in the Computer Software-Medical group, which holds the 27th spot out of 197 industry groups tracked by Investor's Business Daily.
In addition, the IBD SwingTrader name was Thursday's IBD Stock of the Day.
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Veeva Stock Nears Buy Point
The stock jumped 19% following a robust earnings report in late May. Shares traded tightly and formed an early-stage flat base with a 291.69 buy point, according to MarketSurge pattern recognition.
Shares retook their 21-day exponential moving average on Friday. Its 50-day moving average is on a steep uptrend and closing in on the 21-day line, a positive sign. But its relative strength line has been on a downtrend since peaking in early June.
Shares have gained around 34% so far this year.
Veeva Systems Shows Steady Growth
Veeva handily beat fiscal first-quarter earnings and sales estimates on May 28. It also raised its fiscal 2026 profit and revenue guidance, both above views.
Its earnings grew an average 30% over the last four months, while sales growth averaged around 15% over the same time period. Revenue is expected to rise 11% over the next four quarters.
Analysts forecast fiscal 2026 earnings will rise 16% then taper to 9% in fiscal 2027. The company has been a steady profit grower as seen in its Earnings Stability factor of 5 out of 99 possible — with a lower number being better.
Lastly, the software stock holds a best-possible 99 IBD Composite Rating and a 97 Earnings Per Share Rating.
Veeva is expected to report its fiscal second-quarter results in late August.
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