HomeMarket NewsPfizer's Expense Cuts Pose Little Risk for Veeva Systems, According to Baird

Pfizer’s Expense Cuts Pose Little Risk for Veeva Systems, According to Baird

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Veeva Systems sign near cloud-computing company focused on pharmaceutical and life sciences industry applications

Michael Vi

According to investment firm Baird, Veeva Systems (NYSE:VEEV), a cloud software company focused on the pharmaceutical and life sciences industry, is well-equipped to handle any potential challenges arising from Pfizer’s (NYSE:PFE) plan to reduce operating expenses through 2024.

Baird analyst Joe Vruwink, who has an outperform rating and a $242 price target on Veeva Systems (VEEV), stated that the impact on the company is β€œmanageable.” He estimates Veeva has around $15 million in customer relationship management exposure to Pfizer.

β€œR&D subscriptions are typically under multi-year license agreements, and in light of the continued importance of research, we anticipate good resilience in this area,” Vruwink noted in an investor note.

Last week, Pfizer announced its plans to cut operating expenses through 2024 due to lower-than-expected revenue related to COVID-19.

Vruwink mentioned that Veeva’s financial forecasts aren’t usually based on β€œbest case” scenarios. It is likely that the company had already factored in some form of discount from Pfizer due to concerns regarding COVID-related forecasting. Furthermore, Veeva remains on track to achieve its financial goals a year ahead of schedule, as originally outlined in 2019.

β€œWe continue to have a positive outlook on Veeva stock and believe that the company’s progress towards its Cal-24 financial ambitions will drive favorable returns for shareholders,” explained Vruwink.

Shares of Veeva Systems (VEEV) experienced a minor decline of 1.5% during mid-day trading on Tuesday.

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