Wide-Moat Veeva Slightly Decreases Outlook; Shares Still Undervalued

Wide-moat Veeva reported decent second-quarter results, but foreign currency exposure and macroeconomic headwinds are pushing down revenue guidance for the full fiscal year 2023 by $30 million or about 1.5%, which will likely weigh on the stock price in the near term. Veeva saw revenue growth of 17% year over year and a decrease in operating income by 19% year over year (due to higher-than-expected litigation expenses). Although we made slight adjustments in our near-term assumptions to reflect the provided revenue guidance of $2.145 billion for the full fiscal year 2023, we are confident in Veeva’s long-term outlook and continued competitive advantage and maintain our $275 fair value estimate.