Stifel Maintains Buy on Veeva (VEEV) Despite CRM Customer Migrations

Veeva Systems Inc. (NYSE:VEEV) is one of the best healthcare AI stocks to buy now. On December 15, Stifel reiterated a Buy rating on Veeva Systems Inc. (NYSE:VEEV), even as some big pharmaceutical customers shift away from its legacy CRM platform. Stifel sees these migrations as a small, manageable issue that won’t derail Veeva’s overall momentum.

According to the analyst’s assessment, Veeva currently serves 18 of the top 20 pharmaceutical companies with its CRM tools. However, Veeva now expects only 14 to migrate to the newer Veeva Vault CRM, down slightly from earlier hopes. CRM makes up about 20% of Veeva’s total revenue (down from 25% two years ago), and the top 20 pharma clients represent roughly 50-60% of that CRM revenue segment. Stifel crunched the numbers and concluded that Veeva faces only a 2-3% revenue headwind over the next five years from these losses. The firm views the figure as minor and not material.

Nonetheless, KeyBanc Capital Markets took a different direction in its update on Veeva on December 12. Scott Schoenhaus, the analyst in charge, downgraded Veeva from Overweight to Sector Weight. The analyst cited rising concerns that competition in the CRM segment, particularly from Salesforce, is becoming a real drag on Veeva’s outlook. Large pharmaceutical clients currently shopping for new software are increasingly favoring Salesforce’s CRM offerings over Veeva’s solutions, noted Schoenhaus.

Veeva Systems Inc. (NYSE:VEEV) provides cloud-based software solutions for the life sciences industry. This includes applications for regulatory compliance, clinical data management, and customer relationship management. The company has incorporated AI into its platforms to improve drug development and commercialization.

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Disclosure: None. This article is originally published at Insider Monkey.