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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Veeva Systems Inc. (XNYS:VEEV) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VEEV
Name:
VEEVA SYSTEMS INC. (XNYS:VEEV)
Sector:
478.39M
Industry:
Health Information Services
CEO:
Mr. Peter Gassner
Total Employees:
5,482
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -89.26% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VEEVA SYSTEMS INC.(VEEV) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HEALTH INFORMATION SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
169.97
One Month Price Target:
$170.71
Six Month Price Target :
$174.43
Likely Price in One Year's Time:
Ticker:
$178.9
Likely Trading Range Today Under (Normal Volatility)
$169.28
Price Upper limit ($) :
$170.88
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$160.36
This week:
$148.48
This month :
$127.
Other Primary facts
Market Cap:
26.13B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
155.28M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.72%
-16.24%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$214.55
$194.04
$125.39
$145.90
Medium risk (<10%) entry points
Buy Call
Sell Call
$187.36
Buy Put:
Sell Put:
$182.98
$152.52
$156.96
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VEEV
Sharpe Ratio:
2.01%
Comparison:
VEEV, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 95.94% higher than the industry
& is -11.71% lower than the market/S&P 500 average
Average Returns/Yield of
VEEV
Daily returns:
0.06%
Weekly returns:
0.32%
Monthly returns:
1.30%
Yearly returns:
5.07%
Comparison of returns:
Average annual returns/yield (last 3 years) is 206.90% above industry average
Classification:
VEEV, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.88
Statistical test of Returns:
VEEV has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.78%
Weekly Volatility:
6.23%
Monthly Volatility:
12.45%
Yearly Volatility:
43.14%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
6.55%
Volatility in last five trading days has been 135.19% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.65%
Weekly VaR:
-12.64%
Monthly VaR:
-25.28%
How Much Can the price of
VEEV
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-87.58%
This translates to price declining to:
$133.23
This translates to price declining to:
$21.10
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
VEEV is a 78.45% riskier investment compared to the market/S&P 500 & is 52.88% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -18.13% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VEEV
Beta in relation to market/S&P 500--0.78
Expected beta in 1 year's time:
0.713
Expected beta in 3 year's time:
1.008
Unlevered (debt free) Beta:
0.769
Beta in relation to Nasdaq (XNAS):
1.037
Beta in relation to all global stocks::
0.617
Beta Comparison & Analysis
Beta of competitors/peers::
0.834
Beta is -6.34% lower than peers
Average Industry Beta:
0.87
Beta is -10.16% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.16%
Sustainable growth rate is 25.99% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.071
Alpha is -275.15% below industry average alpha yield
Alpha is 450% higher than market/& is unsustainably high
Analysis of Cost of Capital of
VEEV
Equity cost of capital:
0.085
Equity cost of capital is -6.65% below industry mean WACC
Unlevered (without debt) cost of capital:
8.37%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$12.38
Revenue growth rate per share of (3Y):
10.79
Annual revenue growth rate is -71.63% below industry average
EPS:
$2.90
Expected Annual growth rate of EPS (3Y):
23.84%
Expected future EPS growth rate is -49.80% lower than the Health Information Services industry
Free cash flow (FCF) per share:
$4.82
-
-
Debt per share
$0.31
EBITDA per share
$3.46
Valuation Analysis Today of
VEEV
P/E Ratio:
69.04
P/E Ratio of Competitors/Peers:
35.3
P/E ratio is 95.59% higher than main peers & is -81.11% lower than the industry
Stock price/value with industry average P/E ratio: $1,059.81
VEEV is -83.96% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
13.73
Price to sales ratio is 81.13% above the industry mean
P/B (Price to book value ratio):
10.79
Price to free cash flow: 35.29
Price to free cash flow ratio is -66.37% lower than the industry
Net income growth rate (3Y):
149.27%
Net income growth rate is -91.48% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
1.99%
Net debt to equity ratio:
-46.01%
Debt to assets ratio:
1.51%
Net debt to assets ratio:
-34.92%
Debt-to-asset ratio is -95.58% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
15.12%
Annual debt growth is -64% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.58%
Analysis of Key Statistics
Correlation of price movement with the market:
0.559
Statistical significance of correlation:
VEEV has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.376
Stock price is 48.38% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.376
Correlation of price movement with Nasdaq (^IXIC):
-0.064
Covariance of price movement with the market:
-0.103
Kurtosis
4.962
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.219
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
VEEV
Gross Profit Margin Ratio:
290%
Operating Profit Margin Ratio:
26.26%
Operating profit margin is -247.01% lower than the industry
Net Profit Margin Ratio:
290%
Effective Tax Rate:
19.18%
Effective tax rate is -3.17% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.85%
Return on equity (ROE) is -616.80% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
12.78%
Return on assets (ROA) is -836.43% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
3.52
Current ratio is -37.56% below industry average
Cash Conversion Cycle (days):
109.7
Cash conversion cycle is 123.16% above industry average
The remaining useful life of property plant & equipment is: 8.0 years
Stock based compensation to net income ratio:
11.77%
In-depth Efficiency Analysis
Revenue generated per employee:
350.7K
Each employee generates -16% less revenue than industry average revenue per employee
EBITDA generated per employee:
98.1K
Each employee generates -339% less EBITDA than industry average revenue per employee
Profit generated per employee:
75.1K
Each employee generates -195% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
87.3K
Each employee generates 591% more free cash flow than industry average revenue per employee
Assets/Capital per employee
132.6K
Each employee generates 591% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 40.17%
Growth rate in R&D investment/expenditure is -406.85% lower than the industry
Competitors/Peer firms of
VEEV
METTLER-TOLEDO INTERNATIONAL INC. (XNYS:MTD)
RESMED INC. (XNYS:RMD)
Koninklijke Philips NV (XNYS:PHG)
Alcon Inc. (XNYS:ALC)
WEST PHARMACEUTICAL SERVICES, INC. (XNYS:WST)
Takeda Pharmaceutical Company Limited (XNYS:TAK)
AMERISOURCEBERGEN CORPORATION (XNYS:ABC)
BAXTER INTERNATIONAL INC. (XNYS:BAX)
AGILENT TECHNOLOGIES, INC. (XNYS:A)
Current Analyst Ratings
Strong buy�17%
Buy�17%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
1.92B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
527.06M
1.40B
412.28M
178.68M
478.24M
299.57M
-
890.53M
-
-
27.88M
537.56M
504.72M
411.94M
509.68M
97.74M
411.94M
Statement of Cash Flow
Date:
Period:
6.63M
Differed Income Tax :
5.24M
Stock Based Compensation :
48.49M
Change in Working Capital :
291.15M
Accounts Receivables:
301.73M
Other Working Capital:
- 12466.00K
Other Non-Cash Items:
11.31M
Net Cash Provided by Operating Activities:
478.39M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 256938.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
1.18B
965.45M
2.15B
313.69M
-
30.94M
2.50B
106.02M
436.03M
110.17M
-
13.85M
61.02M
727.08M
-
3.22B
18.86M
11.28M
17.72M
608.67M
70.74M
709.55M
48.67M
12.46M
67.62M
-
777.17M
2.00K
1.42B
- 2304.0K
1.03B
April 30, 2021 at 6:00:00 AM
1.42B
2.44B
3.22B
-
59.95M
- 1125028.0K
221.65M
- 2656.00K
- 37949.00K
- 286.00K
-
-
-
17.09M
16.81M
- 2765.00K
454.48M
1.19B
731.71M
478.39M
-
478.39M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
VEEV
2023
2024
2025
2026
2027
$205.49
$216.28
$227.64
$239.60
$252.18