Life Sciences Software w/ 80% Margins | Veeva Systems (VEEV:NYSE)
A critical life science software trading at a discount to intrinsic value.
Authors Notes
Something outside of Australia. Came across this stock while reading other publications. As sectors, Software and Healthcare have sold off, and this is both (a contrarian’s dream). This is definitely something interesting to analyse. Let’s go!
Key Points
Veeva’s dominant position in critical life sciences software and its status as a PBC showcase a high-quality, ethically driven company with high margins and a strong balance sheet.
Favourable industry tailwinds showing global R&D spending above pre-pandemic levels and the Salesforce migration indicate Veeva is in a position to capture more R&D subscription growth and expand margins from less royalty costs.
Multiple valuation methods were employed, using conservative assumptions, leading to a BUY recommendation with a weighted target price of $231 (scenario range between $161 – $295) from its current price of $166.34 (as at 10 May 2026).
Valuation Summary
Executive Summary
Veeva Systems (VEEV) is the leading provider of cloud-based software specifically for the global life sciences industry. Veeva is being recommended as a BUY with a weighted valuation price of $231, representing an implied gain of 39% from the current price of $166.34 (as of 10 May 2026). The Bear to Bull modelling suggested a valuation price range between $161 and $295.
Multiple valuation methods were used to provide the most comprehensive assessment. Scenario and DCF sensitivity analysis was performed, calculating a range of outcomes based on different terminal and WACC rates.
Valuation methods were a traditional DCF (using a WACC of 9.6%), a peer multiples valuation using EV/EBITDA and P/E, and a sell-side target price aggregation. While Veeva trades at a premium to peers (37.5x P/E vs. a 24.8x peer median), this is justified by its dominant market share and best-in-class subscription gross margins of 86%.
In addition, conservative growth assumptions were used in the 3-statement model to provide margin of safety to the downside. The current trading price offers a suitable entry point significantly below intrinsic value.
Investment Thesis
Dominant Moat: Veeva provides mission-critical software for a highly regulated industry. It has kept 14 of the Top 20 clients in the Salesforce migration. Many clients have decided to stay with Veeva post migration, showcasing their strong product offering and re-enforcing a commanding market share. The change provides an opportunity to upsell customers. Research indicated customers use four or more Veeva products on average, making their client base sticky and costly for the clients to replace Veeva.
Margin Expansion: Veeva is successfully migrating customers from Salesforce to Veeva Vault. The transition is progressing faster than expected, with an updated completion date of 2029 from 2030. This will reduce the royalty payments to Salesforce and improve margins long-term.
Favourable Tailwinds: Global R&D funding remains above pre-pandemic levels. The industry is also shifting toward more complex, high-value studies. Veeva’s R&D segment is 55% of their business and is well positioned to capture this spend. The business segment is growing at double digits.
AI Implementation: There has been keen interest from Veeva’s client on using AI agents in their platform. The company is investigating token-based pricing models for AI. The current use cases of AI are operating at 45% margins. This providing a new revenue stream with headroom to increase margins further.
ESG & Shareholder Alignment: Veeva has strong governance policies that align management and employees with shareholders. This includes stock compensation, positive option exercising rules, pay transparency. In addition, the Board announced a $2 billion share buyback program. Given the company’s strong balance sheet, healthy liquidity and no debt, this signals management is confident in the stock’s value as well as providing a source of return to shareholders other than the stock price.
Key Risks
Client Concentration: Veeva has 14 of the top 20 pharma companies as clients. They are a large part of Veeva’s recurring revenue. Should the large clients pull back on spending, reduce the number of studies conducted or leave, Veeva’s revenue will be impacted. Larger customers are slow-moving and risk averse, so the cost benefit to switch critical systems has a higher hurdle and thus less likely. Veeva is mitigating the larger client risk, stating in their earnings call the win rate of midsize clients has been higher than the Top 20.
R&D Spending: R&D and biotech spending is the key driver of growth for Veeva. While the spending trend is currently upwards as sponsors conduct studies on complex compounds, as well as an increase in China sponsored studies, it is prudent to monitor pharma budgets, sponsor R&D spending, and the regulatory environment. Should there be a sign of a decrease, this may impact recurring revenues for Veeva.
Auditor Risk: Veeva’s auditor has servicing them for 10 years. Best practice generally suggests rotating auditors or retendering the contract every 5 years to prevent rubber stamping of financials and ensure independent oversight. While not an immediate cause for concern, it is a risk to monitor. In addition, the auditor mentioned how difficult it is to audit Veeva’s due to the complexity of the business and various systems used to record customers spend.
Company Overview
Founded in 2007, Veeva is a provider of software for the life sciences industry. They provide a range of software products used by pharma and biotech companies from drug research and development (R&D) to commercialization. Their unique offering is a turnkey software platform that smaller companies can use to conduct trials/studies. Bigger clients are able to customise packages. Veeva serve over 1,400 customers.
Veeva helps life science companies bring products to market faster and more efficiently as the process to conduct a trial is slow and arduous. They also help maintain compliance with government regulations. Uniquely, Veeva is a Public Benefit Corporation which means they are designed have a social or environmental impact as well as make a profit. PBC’s are legally required to consider the impact of their decisions on stakeholders like employees, communities, and the environment, and report on such matters.
At present there are 7,928 worldwide employees (up by 637 from prior year), 4,194 of which are in the United States.
Debt & Capital Management
Veeva is led by principal founder and CEO Peter Gassner. The company has significant institutional backing (circa 90%) from the likes of Vanguard, Blackrock, T.Rowe Price, Alliance Bernstein and more. Of the floated shares, 98% are held by institutions, leaving little room for wholesale, or retail. Peter is one of the largest individual holdings with about 7.5% of company shares.
As part of the company’s compensation, it regularly pays employees in stock. This creates staff alignment with the mission and success of the company.
Key management include Peter Gassner (CEO), Brian Van Wagener (CFO), Tom Schwenger (President & Chief Customer Officer), and Nitsa Zuppas (President & Chief of Staff). Average tenure of management is 9 years, with some of the more senior personnel over 10 years. This build confidence that the experience and expertise of Veeva is remaining inhouse.
Short Interest
This has been historically low for Veeva. Currently short interest sits at 3.92% of the free float. This is the highest in the last 5 years. The increasing short interest spiked in late 2024. While the % short is minimal, the share price drop from ~$300 to ~$165 may satisfy the short sellers enough to exit.
Recent Earnings Call
Veeva held a results call in March 2026. It was mainly Q&A from sell-side analysts. Key insights drawn from the call were:
AI Implementation
The company is funding programs to help clients clean their data and helping with automation, specifically with regards to leveraging AI, (sidenote, almost every question was AI related).
AI modules will be priced using a token-based system. Apparently, the margins for this model are 45% currently, with expectations it will grow. Current subscription margins are 75%
There is “extreme” interest in clients for more AI integrated solutions.
Salesforce Split
As customers migrate to Vault CRM, royalty payments to Salesforce will roll off, likely improving profitability
CRM is expected to shrink to 10% of the business from 20% by 2030. This is immaterial considering the growth of other business units.
The migration of customer onto Vault CRM has been a major upsell catalyst with moderate uptake. Company on track to migrate 14 of its 20 top clients.
Customers
Products in the R&D space are currently outperforming commercial products in terms of growth speed. We have seen this in the financials.
The win rate in the midsize market has been higher than the Top 20. This is positive given it has won 140 or midsize clients. A long tail of smaller customers will be a net benefit.
Find patients for clinical trials remain a primary pain point for the industry.
Guidance Updates
Veeva will no longer provide quarterly guidance, opting instead to report on rolling trends to better reflect long-term business health. Their 10Q’s are already in this format.
Current guidance assumes a stable macroeconomic environment with no significant shifts.
JPM Health Conference 2026
This took place earlier in the year. Veeva presented. While the webinar for the session has expired from viewing, the presentation indicated that Veeva reaffirmed their guidance for FY27. Veeva also confirmed they have 115+ customers live on Vault (including some of the Top 20). Total revenue for FY27 is calculated as $3,574m. This is slightly below guidance ($3,585m), but our assumptions are conservative. We assume a growth rate using harmonic average of history. Specifically, harmonic average of the past quarterly growth rates for revenue.
When viewing just the subscription revenue for Commercial and R&D, our figures and Veeva’s are roughly in line. This suggests to us that a) Veeva is also using conservative growth estimates b) sell-side are using optimistic growth rates, based target prices.
We suspect that there is also more revenue expected from Professional services as this was not explicitly mentioned in the guidance. Likely from a combination of the migration assistance out of Salesforce and helping clients with AI implementation.
We believe the guidance is achievable. Based on Veeva’s track record, they usually beat consensus on GAAP EPS figures.
Business Model & Segments
Veeva’s business model is two-fold; subscription software for life sciences and professional services, essentially consulting and implementation.
There are two product areas: Commercial Solutions and R&D Solutions. Each consist of different software platforms that can be turnkey or customised for client needs. The revenue mix comes from professional services (16% of the business), and subscription services (84% of the business).
Commercial Solutions
Comprehensive applications to assist in sales, marketing, and getting a product ready for launch. According to management, the TAM for Commercial is $6B.
Applications include: Veeva CRM (20% of business currently), Veeva Vault Medical (for medical inquires), Veeva Crossix (privacy platform, newly acquired), Veeva Open Data (sales) and other lower revenue ones.
Commercial as a category is 45% of the business as at FY26. This has been on a downward trend since FY23 (52%). R&D has been increasing in revenue split. Margins for Commercial are 80%, commercial subscriptions are higher at 88% with professional services at 17%.
Revenue growth rates are usually high single digits except for FY2026 which achieved 12.1% for FY26.
R&D Solutions
Development applications spanning clinical, regulatory, quality, and safety functions built into Veeva Vault (its premia platform). R&D Solutions support clinical drug development. The goal is to streamline the trials process which is known to be fraught with bottlenecks.
Applications include: Veeva Vault Clinical ($3B TAM), Clinical Data Management Suite (CDMS, collect and store data and documents), Veeva Vault RIM (Regulatory Information Management), and a host of other for quality, and safety.
As mentioned, R&D as a category is 55% of the business as at FY26. And growing. We forecast it grows to 62% by FY31. Margins are more accretive here with 80% overall, 87% for subscriptions and 44% for professional services.
Revenue growth rates are healthy double digits, exampled by FY25 (23%) and FY26 (20%).
EBITDA Bridge
When we assess the EBITDA bridge of Veeva for FY26, we see a majority of the outflows come from the Operating expenses of R&D, Sales & Marketing and General Administration. We’ve split out the Stock Based Compensation (SBC) as a separate component. The actual costs of the subscription and professional services are minimal in comparison. Veeva confirms that a majority of their costs are employee related expenses.
Using the assumptions in the valuation model for FY27, we can see Opex increases dramatically. The explanation for the growth assumptions are in the valuation section below.
Regulatory Environment
Veeva operates within a highly regulated industry. Their clients are governed by the FDA and EMA (in Europe). Its software is designed to help clients maintain compliance with regulations. Veeva to looking to helping med-tech and pharma firms navigate data privacy and clinical trial transparency laws with its “Unified Strategic Platform”.
Over the last two US presidents, there have been two key pieces of legislation with differing impacts:
Inflation Reduction Act (IRA): Maximum Fair Price negotiations. A mandated ceiling price where the Secretary of the Department of Health and Human Services is authorized to directly negotiate MFP for eligible drugs.
The IRA is a double-edged sword. While it pressures pharmaceutical margins (tightening software budgets), it creates a need for compliance and data transparency tools.
The One Big Beautiful Bill Act (OBBB): Restored 100% tax deductions for domestic R&D expenditures. This has acted as a critical counter-weight to the IRA, incentivizing Veeva’s customers to keep clinical trial operations within the U.S., which directly benefits the Veeva Development Cloud. We are likely to see lower operating expenses for drug R&D, potentially more budgets for software. The OBBB also enacted roughly $1 trillion in Medicaid cuts, forcing manufacturers to expand patient assistance programs and discount tracking. Higher regulatory complexity drives demand for Veeva’s applications to manage contracting and rebates.
Global Data Privacy Regulations: Veeva is subject to data privacy laws in the USA (HIPAA), Europe (EU GDPR), the UK (UK GDPR), and China (PIPL), where they process data on behalf of customers who operate as data handlers. These laws govern and protect how health information is collected and maintained.
Industry Environment
Clinical trials are a long, complex processes, with a lot of regulatory compliance. Early clinical trial software applications streamlined operations from pen & paper to online. Previously, patients’ clinical trial data was collected in a medical chart. The transcriptions were done by a nurse, who then faxed it to pharma or data management.
Electronic data capture (EDC) allows patient data capture during the patient visit improving real-time insights. Trial sponsors increasingly adopted software, driving rapid growth in application providers R&D spending is the main driver for Veeva’s software. A report from IQVIA (Veeva’s competitor), stated that despite pricing pressures, the industry is seeing a shift toward high value studies or trials and AI-enabled efficiency. The same report also indicated that R&D Funding levels are “well above” pre-pandemic levels.
Some insights from the 2026 report were;
R&D deals between China-headquartered and international companies reached an all-time high.
Clinical trial starts are increasingly concentrated among US sponsors.
The small molecule share of trial starts has experienced a long-term decline in all development phases. This indicates the shift to high value, complex, science.
These industry trends should drive further adoption of software and data. VEEV’s products address many of these issues and should capture more wins as a result.
Another report from ZS also stated that R&D spending is shifting in favour of high value assets and toward Chinese biotechs. Asia as a segment account for 10% of Veeva’s revenues. This is expected to grow in future. For modelling purposes, We’ve kept the regional allocations roughly consistent.
In 2023 Veeva held 26.8% market share, followed by IQVIA 17.7%, Salesforce 16.4%, and Oracle 11.2% according to Intuition Labs. They estimated the total TAM at $20 billion in 2025/26. Roughly 16% penetration by Veeva based on revenue ($3.2b FY26).
The industry has high switching costs. Moving platforms takes time, money and training to fully integrate. That is why we are seeing 14 of Veeva’s top 20 clients stay on their platform, rather than moving to another, like Salesforce, during the split.
Competitive Moat
In terms of its competitive advantage, Veeva Systems has high switching costs and mission critical software for a highly specialized and highly regulated life sciences. The high switching costs keeps customers sticky, especially if pharma clients want to keep compliant
The platform strengthens the moat as customers adopt more modules. As of FY25, major customers owned an average of 4+ products making them sticky. Veeva has about 40 products it can sell.
Veeva is also innovating to design and create new product for clients. At present there are 111 current patents expiring between 2028 and 2048 with another 164 pending patent applications. This increases their competitive moat for a) protecting intellectual property and b) future growth avenues.
Competitors
Veeva has a range of competitors in the space including Oracle, and Salesforce. Below are two closer competitors described.
Certara: Accelerates medicines to patients using proprietary biosimulation software and technology to transform traditional drug discovery and development. Its clients include global biopharmaceutical companies, leading academic institutions, and key regulatory agencies across 60 countries. They are one of the smaller competitors.
IQVIA: Main competitor. Provides biopharmaceutical development, commercial outsourcing, information services, and technology tools on a global basis. Operating in over 100 countries across the Americas, Europe and Africa, and the Asia-Pacific. The company primarily serves biopharmaceutical companies, as well as other healthcare companies. It was founded in 1982 and is based in Durham, North Carolina
In a comparison to direct peers, VEEV is trading at a premium PE 37.5x (51% Premium to harmonic mean), and EV/EBITDA 34.2x (135%). In terms of Gross Margins, VEEV has a higher margin for its products (75% vs 61% mean).
Veeva looks expensive to peers on EV/EBITDA and PE multiples.
Capital Management & Balance Sheet
Veeva has an asset-light, highly liquid balance sheet. They also have no debt.
Cash consists of 16% of Assets ($1.4b), and their short-term investments consist of 57% of Assets ($5.1b). The net effect of investments maturing and the purchase of new securities is roughly 30% of revenues. Veeva appears to be very well capitalised. With plenty of dry powder to execute of strategic objectives, new products, and acquisitions. Their JPM Healthcare Conference presentation mentioned strategic acquisitions.
In terms of their business model; cashflows, and receivables are large with a spike in Q4 each year when customers renew their subscriptions for the following year. At the same time, payables are very low. Meaning Veeva pay its obligations promptly. This is was also validated when calculating days sales and payables outstanding. Sales outstanding was 130 days in FY26 while payables outstanding is 16 days as of FY26.
Veeva also receives money from customers classified as deferred revenue (unearned revenue). This is about 50% of revenue each financial year. This is good for Veeva’s balance sheet as they receive payment first. Execution risk is minor as clients are paying for software they already use (or will use) in advance.
Margins are best in class for its peer group. When we remove the impact of stock-based compensation from the cost of services, the gross margin increases by from high 70% to near 80%.
In May 2026, the Board authorized a $2 billion share repurchase program, returning capital to shareholders. This appears to be a positive signal given the company has never paid dividends and has the strong cash balance. As additional rationale for the stock buyback, it could be a method to offset the stock compensation program which is extensively utilized. Although this is an assumption.
Contract Structure, Customers, & Channel Checks
Veeva’s contract are subscription-based models. Subscription costs are not publicly available from Veeva has clients are given bespoke pricing to suit their needs. However, sources online put the typical range between $600–$2,400 per user per year.
The contracts appear to be yearly as the deferred revenue and accounts receivable figures appear to be cyclical. The largest changes occur in 4Q each year, where customers simultaneously pay their subscriptions and renew. Deferred revenue is 55% of the subscriptions segment on the FY, this is the nature of a subscription model.
Survey Outreach
In order to get direct feedback from users, we emailed key partners (and IR teams) listed on Veeva’s website to enquire.
Companies listed on Veeva website as key partners:
Each company type was sent a slightly different set of questions.
Veeva also has a website where we can search for clinical studies happening now. Biogen and Gilead are currently conducting trials in Melbourne. They were contacted to see if they are using Veeva.
Survey Responses
Unfortunately, only Novo Nordisk responded to the survey. Only confirming that they are indeed a customer.
Employees
Reviewing Glassdoor for employee reviews, 73% approve of Peter Gassner. Their average employee score out of 1,519 ratings is 3.5, whereby 60% of staff would recommend working there. Veeva score is average on an absolute basis but is within 1 standard deviation of the Information Technology sector. The main criticism from employees is senior management.
Veeva Survey
Similarly to the customers, we email Veeva’s IR team with a couple of questions for them to answer. We did not receive a response. The questions submitted are in the Appendix.
Sell-Side Analysis
Veeva is a well-covered stock. There are upwards of 20 broker analysts forecasting the stock (see below). Majority of the analysts have recut their price targets because the quarter and earnings call have just been completed. Median target price is $275, a 65% gain on the current share price. The earnings call had analysts excited by the prospect of AI for the business.
Current forward PE multiples from sell-side has Veeva trading on 17x. Based on out calculations, that is 80% growth in EPS above estimates.
We’ve been conservative in our calculations, using harmonic growth rates from history. In the first year, we assume the growth rates stable with harmonic history, then over 5 years, the harmonic average grows by slightly more than the cost of equity over the next 5 years. A more details explanation is Valuation section.
Sell-side median target price ($275) is near the bull case price ($285). This tells me sell-side growth expectations are very high. Veeva is still a solid investment even under conservative figures. If Veeva slightly misses or near misses on high expectations, the share price could detract further. Sell-side also appear cautious on the multiples.
Supplier Analysis
As a software provider, Veeva’s suppliers are primarily cloud infrastructure and technology partners. Historically, Salesforce was a critical partner, providing the platform for Veeva CRM. However, Veeva is insourcing by moving core applications to its proprietary Veeva Vault platform, significantly reducing its dependency on external providers like Salesforce, which now becomes a competitor.
Amazon Web Services are Veeva’s cloud infrastructure partner. This is critical to Veeva’s operation. As they grow, Veeva will need more capacity from data centre cloud services for the data it collects, as well as any computing power required to run the AI tools on the platform. This will increase the expense line for DC capacity. The risk is Amazon has pricing power to pass through higher energy and internet costs. That is until more supply comes to market.
In terms of costs, Veeva states most of their operational costs are employee-related expenses.
ESG Analysis
As mentioned earlier, Veeva is a Public Benefit Corporation. ESG is core to Veeva’s charter. The company has committed to reducing absolute Scope 1 and 2 emissions by 58.8% and Scope 3 emissions by 63.8% per million USD of gross profit by FY2035. For the fiscal year ending January 31, 2025, Veeva reported approximately 55,000 metric tons of CO2e emissions. Veeva also have a 1% Giving Program, whereby Veeva provide 1% of an employee’s salary to support a non-profit of the employee’s choosing.
Morningstar have assessed Veeva as a 4 Star ESG company, with a low-risk rating. One area of concern from them is data privacy and cyber security. This is mitigated as Veeva’s ownership of Crossix which is meant to manage data privacy.
Management share options have vesting rules that are favourable to investors. Shares need to be above 52-week high for 60 days and options are exercised at the 52-week high price. This provides a great alignment with shareholders and prevents insiders from benefitting on lower strike prices when the share price falls. Employees also received shares as part of their compensation. This creates good alignment of staff to Veeva’s purpose and long-term growth.
Governance
We believe Veeva’s transparency regarding compensation and other adjacent topics as very positive. They disclose the non-employee director compensation plans as well as disclosing the annual total compensation difference between Mr Gassner and the median employee ($470,833 and $140,473 as of FY26, respectively). Unlike other highly specialised and competitive industries, Veeva promotes that it does not have a non-compete for staff. This policy likely increases Veeva staff retention as staff are not “locked out” of their industry by leaving.
Board Composition
The board consists of people with a wealth of experience in software development, healthcare, life sciences and robotics. Many held positions at other successful med-tech companies (like Intuitive Surgical) or currently sit on boards of other adjacent businesses.
On the downside, the majority of the board are men. Having a diverse board in both professional skillset and life background would add benefit to decision making. In addition, a couple of the directors are co-founders of Veeva or former management.
There is a risk of biased decision making and influence when you have 3 of 9 votes more than likely to be in line with each other. Full list of board members in Appendix.
The CEO and Chair are separate individuals, a sign of good governance.
Auditor Report
A cause for concern from governance best practices is Veeva’s auditor has been servicing the company for 10 years. Rule of thumb is the auditor should be rotated or at least have them tender for the role of auditor every 5 years. However, there is no evidence (that we could find) that suggests Veeva did not go to market for an auditor. The perceptive risk is present. There have been examples in the past of companies (in Australia) whose auditor’s rubber stamped the financials to keep the contract for work.
The auditors report also noted a Critical Audit Matter. Veeva has multiple service offerings (Subscription vs. Professional Services) and uses various IT applications to track them, the auditor stated they used various IT methods to collect the data and some judged to assess it. This did not change their opinion though.
SWOT Analysis
Strengths
Holds a commanding lead in the CRM space, with 80% market share.
Gross margins are extremely wide at 86% for subscriptions business.
Recent inclusion in the S&P 500 and a large institutional backing make confidence in the company grow.
The company has a strong balance sheet with no debt, lots of cashflow, short term investments and cash.
The industry has high switching costs. Clients are more than likely to remain on platform after Salesforce separation.
Weaknesses
High concentration in North America, but with growing revenue segment in Asia.
Veeva operates in a niche segment, life sciences and has a commanding share. Future growth is likely only possible in other sectors and or more growth in non-USA markets.
Considering Veeva’s strong balance sheet, it has not distributed any dividends. The concession is the buyback program.
Opportunities
Expansion into adjacent regulated industries will provide more avenues for growth and a diversified revenue mix.
With a healthy balance sheet, Veeva could acquire other smaller businesses to add to its verticals. The only risk is they acquire a company outside of its core competency just to grow.
AI-driven software layers are being included in Veeva’s products. Clients are enjoying the additions and the use cases for AI in life sciences. In addition, clients have themselves been implementing variations to the standard AI agent for their uses.
Threats
Increased competition from competitors. With such high margins and market share, competitors could be more aggressive with pricing just to win clients.
Should the R&D spending in life science slow, this would dramatically impact Veeva’s primary and growing segment. Legislation is currently favourable. With the current OBBB Act, there is a sector tailwind for at least the next 4 years.
AI threatens software business models. Currently a majority of the business is subscription per user based. Veeva is exploring usage-based models which should mitigate some of the risk. However, if clients are becoming more efficient with better models, the number of users and the usage may drop.
Valuation
Multiple valuation methods were used. A traditional DCF using EBIT, an EV/EBITDA multiple and PE multiple valuation using median of peers, as well as aggregated sell-side targets. Target prices for a bear, base, and bull case were arranged and weighted. Multiples Valuation was given the lowest weights as they are blunt estimations as well as the range of the metrics from the peer group were too wide to be meaningful, in our opinion.
Sell-side estimates were given a reasonable weight as the analysts will be conducting their own forecasting. However, given the optimistic assumptions they are likely using a weight of 30% was assigned.
In another step, the weighted product of the bear, base, and bull cases were calculated on the likelihood of scenario outcomes. A larger weight was allocated to the base case. The combined target price was $231, an implied 39% gain on today’s price.
The recommendation for Veeva is BUY.
Even based on conservative forecasting estimates, the DCF bear case still indicated the share price is trading below its intrinsic value.
Below is more detail on our assumptions and valuation methods.
Assumptions:
As per Veeva’s annual report they expect all of their costs and expenses to increase in future.
Higher R&D and Opex increase more from employee compensation
Sales & marketing higher from pushing products, with the hope of upselling.
Admin cost expected to decrease.
Our revenue growth forecast is conservative. Taking the harmonic mean of revenue growth from the prior 4 years (pcp) and then applying a growth factor on top. Using harmonic mean dampens the effect of outliers (although it does not work for negatives), and assumes a regression to an average growth rate over the long term. Being conservative in this regard provides a realistic floor for the valuation.
For example, below are the harmonic pcp growth rates for the next 8 quarters. We assume the growth rates from FY27 to FY31 will be 1.5x higher (150%) over 5 years. This equates to 8.4% per year for 5 years. This is below Veeva’s WACC (9.6%)
When rolled up we can see the FY27 growth rate is 11.9% for the combined business segments. This is below the prior FY rates.
Regarding costs, we assume that they increase faster than revenues, a 14.9% increase per year for 5 years. This equates to 2x the growth of costs from FY27 to FY31. This is a further conservative assumption: costs growing faster than revenues.
We use the growth rate assumptions to forecast the business segments first. Using those to then forecast the Balance Sheet, Income Statement, and Cash Flow statement.
Discounted Cash Flow
Traditional DCF using EBIT (operating income) as a starting point, adding D&A, less changes in WC, Capex and tax. The effective tax rate was use rather than the corporate tax rate.
WACC of 9.6% was derived from:
10-Y US Treasury bond rate of 4.40% as of 05 May 2026.
Equity risk premium estimate of 4.46% from Aswath Damodaran, well known professor with expertise and data in valuation and ERP.
Beta of 1.17 based on the average of various sources and calculations (daily & weekly regression of share price to index, and Aswath Damodaran estimate for the sector).
There is no debt, so WACC is entirely cost of equity.
Using this method calculated a valuation price of $212.32 (27.6% implied gain) using a 3% terminal growth rate
A valuation price matrix was constructed using slight deviation in terminal value (ranging from 1% to 5%) and WACC (7% to 11%). Using the ranges we calculated the various valuation price and their implied gain or loss on today’s price.
Multiples Valuation
This method has been mentioned in the competitor analysis section. To summarise, the metrics for Veeva’s peer group of competitors was source from various outlets.
Then using the EV/EBITDA median of the competitors, the implied EV and valuation price of Veeva was estimated. This was also done using the P/E median except PE was used to find the implied EPS for Veeva, then the valuation price.
Based on this method, Veeva appears to be trading at very high multiples to the median peer group.
However, one caveat is the peer group is broad in scope. Some are very large like Salesforce and Oracle, which have diversified software businesses, not just life sciences. Others were small niche players such as Certara.
Sell-Side Valuations
There is value is comparing the sell-side valuation estimates. Using information from CMC Markets, we gathered the listed of analyst who cover Veeva to aggregate their share price forecasts. Almost all of which have recently been updated
Sell-side estimates have and implied EPS growth rate of 80% based on a forward PE multiple (source from Finviz). Tabulated are the lowest, median, and highest valuation targets for the stock.
Appendix
Veeva Survey Questions
With the Salesforce partnership sunsetting, what has the response been from early migrators to Vault CRM compared to legacy users?
Are you seeing any increased churn or a higher upsell rate into the wider Vault suite during this transition?
What has been the impact on the topline as a result of the OBBB Act’s R&D tax deductions?
With AI agents being implemented in Vault, is Veeva exploring usage or token-based subscriptions as well as per-user?
Is there an ideal subscription model mix target?
Have clients been utilizing the AI agents and what has been their response?
With the recent stock buyback program announcement, is this intended as an offset to the employee stock-based compensation program?
Does Veeva expect buybacks at regular intervals and sizes?
A recent industry report from IQVIA cited that China has seen a significant increase in global trials usage. Are you seeing a shift in your customer mix toward local Chinese biotech firms?
Are there any specific regulatory hurdles unique to the region?
Customer Survey Questions
Product
Which Veeva products (e.g., EDC, Vault, QMS, RIM) do you use?
What specific business problem were you looking to solve when you chose Veeva?
What were you using before Veeva (a specific competitor, or an internal/manual system)?
If you switched from another provider, what was the “tipping point” that made you move to Veeva?
Experience
What does Veeva do better than the competitors you’ve seen or used?
Are there any particular features you like?
Are there any particular features that could be improved?
Satisfaction (1 = Strongly Disagree, 5 = Strongly Agree)
Veeva’s products provide significant value relative to the time and effort invested. [1] [2] [3] [4] [5]
I am highly satisfied with the responsiveness and expertise of Veeva’s customer service. [1] [2] [3] [4] [5]
Our organization is likely to expand our use of Veeva tools in the future. [1] [2] [3] [4] [5]
Delivery Partner Survey
Product Implementation
Which Veeva products are the most sought after by customers (e.g., EDC, Vault, QMS, RIM)?
How does the implementation of Veeva’s software compare to others?
What other/third party software pairs well with Veeva Systems?
Satisfaction (1 = Strongly Disagree, 5 = Strongly Agree)
Veeva’s products are better than the competitors. [1] [2] [3] [4] [5]
We are highly satisfied with the responsiveness and expertise of Veeva’s customer service. [1] [2] [3] [4] [5]
Our organization is likely to expand our use of Veeva tools in the future. [1] [2] [3] [4] [5]
Clinical Trial Survey
Product
Are you using a Veeva product for the clinical trial, if so which (e.g., EDC, Vault, QMS, RIM)?
Why you did/did not choose Veeva over another providers, if applicable?
Experience
Are there any particular features you like?
Are there any particular features that could be improved?
Satisfaction (1 = Strongly Disagree, 5 = Strongly Agree)
During the trial, Veeva’s product/s has provided significant value relative to the time and effort invested. [1] [2] [3] [4] [5]
We are highly satisfied with the responsiveness and expertise of Veeva’s customer service. [1] [2] [3] [4] [5]
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