Cloud Computing Sector Ideas

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Veeva Systems - >>> 3 Top Large-Cap Stocks to Buy in December


Veeva Systems (VEEV), a cloud services provider for life science companies, is a solid growth stock for three simple reasons.


https://www.fool.com/investing/2020/12/06/3-top-large-cap-stocks-to-buy-in-december/


First, Veeva's cloud services help drugmakers maintain customer relationships, store and analyze data, track clinical trials and regulations, and more. Competition between these drugmakers, which remains intense regardless of the macro environment, boosts demand for Veeva's services.

Second, Veeva enjoys a first-mover's advantage in its niche market. Its list of customers include pharmaceutical giants Pfizer and Moderna, and its subscription-based ecosystem -- which lands clients with its CRM (customer relationship management) platform, then expands with additional tools for cloud storage, AI-powered analytics, and other services -- widens its moat against potential challengers. Lastly, Veeva's scale and pricing power enable it to remain firmly profitable by both non-GAAP and GAAP standards.

Veeva's revenue rose 35% year-over-year in the first nine months of fiscal 2021 (February through October 2020), and its non-GAAP net income grew 33%. It expects its revenue to rise 31% for the full year, and grow another 18% to $1.71 billion next year. It has also reiterated its long-term goal to generate $3 billion in annual revenue by 2025.

Veeva expects its non-GAAP earnings to rise 29% this year, while analysts expect 10% growth next year. Those growth rates might not seem high for a stock that trades at nearly 90 times forward earnings, but I believe its recession-resistant business model, wide moat, and stable growth rates all justify its premium valuation.

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