Could Veeva Systems Be a Millionaire-Maker Stock?
Veeva Systems (NYSE: VEEV) provides cloud-based software services for the global life science and pharmaceutical industries. The company's services include (but are not limited to) building databases to facilitate the progress of clinical trials, keeping investigators on track with their regulatory submissions to administrative bodies such as the U.S. Food and Drug Administration, and tracking orders between pharmaceutical representatives and their customers. Veeva's innovation of bridging the gap between the information technology (IT) and healthcare sectors has achieved much acclaim. Indeed, the company's stock has returned more than 420% since its IPO in 2013, outperforming the S&P 500 index's 67% return in the same period.
But like all high-quality growth companies, Veeva is trading at a staggering premium. Currently, the company is valued at over $29 billion, despite generating only $1.1 billion in revenue and $301 million in net income last year. Investors obviously have a rosy outlook on the company if they are willing to buy its stock at 25.5 times sales and 93 times earnings. The valuation has some skeptics wondering whether it's really worth it at this price.
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Source Fool.com
