Veeva Systems Inc. (VEEV): A Bull Case Theory

We came across a bullish thesis on Veeva Systems Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on VEEV. Veeva Systems Inc.'s share was trading at $269.20 as of August 29^th. VEEV’s trailing and forward P/E were 55.39 and 35.7 respectively according to Yahoo Finance.

Veeva Systems (VEEV) delivered a robust Q2 2025 with revenue of $789.1 million, up 16.7% YoY and 4% QoQ, beating estimates by 2.8%, and non-GAAP EPS of $1.99, up 4.7% versus expectations. Operating margin expanded to 44.7% (+3.3 pps YoY) and free cash flow margin surged to 29.4% (+16.1 pps YoY), reflecting operational efficiency across subscription and professional services. Subscription revenue reached $659.2 million (+17.4% YoY) with gross margin of 86.2%, while professional services contributed $129.9 million (+13% YoY, GM 33.4%). Despite net new ARR declining 10.6% YoY, the company maintained strong execution with a CAC payback period of 9.3 months.

Veeva’s Vault CRM is a major growth driver, with nine of the top 20 pharma companies committed and two live in major markets, positioning VEEV ahead of Salesforce in top-tier adoption. About 300 customer migrations are underway, expected to peak in 2026–2027, which should bolster revenue and margin expansion. Clinical products also performed strongly, with R&D subscriptions showing their best sequential growth in two years and full adoption of the Trial Master File across top pharma. AI integration into Vault and other suites is poised to enhance efficiency, workflow automation, and long-term market expansion.

Strategic partnerships with IQVIA, Microsoft, and SAP further strengthen product integration, while the horizontal CRM pilot offers optional expansion beyond pharma. Despite minor adoption lags in Compass and lumpiness in Crossix usage-based revenue, management raised FY guidance to $3.134–3.140 billion (+14.2% YoY), reflecting confidence in the $6 billion five-year revenue target. Veeva combines high-margin recurring revenue, structural adoption advantages, and emerging AI-driven growth, presenting a compelling investment case with both near- and long-term upside.

Previously we covered a bullish thesis on Veeva Systems Inc. (VEEV) by Francesco Ferrari in March 2025, highlighting its high-margin recurring revenue, strong cash flow, and $5 billion net cash position. The stock has appreciated around 12% since coverage as execution remained strong. Sergey shares a similar thesis but emphasizes Q2 2025 results, Vault CRM adoption, and AI-driven growth as key near-term catalysts.

Veeva Systems Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held VEEV at the end of the first quarter which was 60 in the previous quarter. While we acknowledge the potential of VEEV as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.