Reasons to Hold Veeva Systems Stock in Your Portfolio for Now

Veeva Systems Inc. VEEV is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by a solid second-quarter fiscal 2026 performance and strategic deals, is expected to contribute further. However, rising operational costs remain a cause for concern.

This Zacks Rank #3 (Hold) company’s shares have risen 36.9% in the year-to-date period compared with 27.7% growth of the industry. The S&P 500 Composite has decreased 14.1% during the said time frame.

The renowned provider of cloud-based software applications and data solutions for the life sciences industry has a market capitalization of $46.89 billion. The company anticipates 23.5% growth for the next five years and expects to maintain its strong performance in the future. It delivered a trailing four-quarter average earnings surprise of 9.7%.

Reasons Favoring VEEV’s Growth

Robust Product Portfolio: Veeva Systems delivered another strong quarter, with revenue rising 16.7% year over year to $789 million, exceeding guidance on broad-based strength across Commercial and R&D portfolios. Growth was driven by continued subscription momentum, particularly in Vault CRM, its next-generation CRM built on the Vault architecture, now adopted by nine of the top 20 pharma firms, with two fully live in major markets. New commercial applications like Campaign Manager, Service Center, and Patient CRM also gained traction following the company’s transition off Salesforce.

On the R&D side, Veeva Systems’ Development Cloud showed steady expansion, with subscriptions growing at the fastest sequential pace in two years. Adoption strengthened across clinical, regulatory and quality solutions, while the Quality Cloud advanced with LIMS, Batch Release and Validation Management now at full cloud status.

Crossix continued to be a key growth driver within the Commercial Cloud, supported by rising demand for data-driven marketing analytics. Combined with strong performance in Data Cloud offerings such as Compass, OpenData, Link and Pulse, Veeva Systems continues to expand its integrated ecosystem and solidify its leadership as a key technology partner to the global life sciences industry. 

Strategic Deals: Veeva Systems has strengthened its presence in the life sciences industry through major partnerships and enterprise wins. In September 2025, Gilead Sciences adopted Veeva Vault CRM, while an August partnership with IQVIA resolved long-standing disputes and enabled seamless integration of IQVIA data within Veeva Systems’ Commercial and Development Clouds.

During the second quarter, two top 20 biopharmas went live on Vault CRM, another committed to it, and several others adopted Veeva Systems’ eTMF, Study Startup, Site Connect, and regulatory modules, highlighting its growing role as the digital backbone driving modernization and integration across clinical and commercial operations.

Strong Q2 Results: Veeva Systems exited the second quarter of fiscal 2026 with better-than-expected results, wherein both earnings and revenues beat their respective Zacks Consensus Estimate. The uptick in both top and bottom lines and robust performance by the Subscription services segment during the quarter were impressive. The uptrend in Professional services and others’ revenues also bodes well.

Veeva Systems is advancing its AI-driven strategy with the rollout of Veeva AI, featuring agentic AI within the Vault Platform and application agents across its suite, with initial releases for CRM and commercial content in December and broader expansion into clinical, regulatory and quality functions through 2027.

A Factor That May Offset the Gains of VEEV

Rising Costs: Veeva Systems has been experiencing rising operating costs over the past few months. General and administrative expenses for the second quarter of fiscal 2026 increased 56.1% year over year. Management expects sales and marketing expenses to increase in fiscal 2026, primarily due to employee-related expenses as the company raises its headcount to support its sales and marketing efforts associated with its product offerings and continued expansion of its sales capacity across all its solutions.

In the fiscal second quarter, the total operating expenses increased 17.3% year over year. Veeva Systems expects operating expenses to increase in fiscal 2026, primarily due to employee compensation-related costs. 

Estimate Trend

Veeva Systems is witnessing a positive estimate revision trend for fiscal 2026. In the past 60 days, the Zacks Consensus Estimate for fiscal 2026 earnings per share (EPS) has moved 15 cents north to $7.68.

The Zacks Consensus Estimate for third-quarter fiscal 2026 revenues is pegged at $791.9 million, indicating a 13.3% improvement from the year-ago quarter’s reported number. The EPS estimate for the third quarter of fiscal 2026 is pinned at $1.95, implying a 11.4% improvement year over year.

Key Picks

Some better-ranked stocks in the broader medical space are Masimo MASI, Merit Medical System MMSI and West Pharmaceutical Services WST. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masimo shares have lost 10.4% so far this year compared with the industry’s 7.4% decline. Estimates for the company’s 2025 earnings per share have increased 1.3% to $5.30 in the past 30 days.

MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 13.8%. In the last reported quarter, it posted an earnings surprise of 8.1%.

Estimates for Merit Medical’s 2025 earnings per share have increased 0.8% to $3.63 in the past 60 days. Shares of the company have lost 13.8% so far this year against the industry’s 1.1% growth.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.92%. In the last reported quarter, it delivered an earnings surprise of 17.44%.

Estimates for West Pharmaceutical’s 2025 earnings per share have increased 1.2% to $6.74 in the past 60 days. Shares of the company have lost 18.2% so far this year against the industry’s 1% growth.

WST’s earnings beat estimates in each of the trailing four quarters, the average surprise being 16.81%. In the last reported quarter, it delivered an earnings surprise of 21.85%.

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This article originally published on Zacks Investment Research (zacks.com).

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