Veeva Systems' (VEEV) guidance implied a potential further deceleration for the company's research and development products, but a catch-up with management indicated the R&D segment growth is tracking to plan, Oppenheimer said in a note Thursday.
Management had framed the implied slowdown as a portfolio-mix dynamic, with the "old guard" products still growing but maturing, while "new guard" products are growing faster, according to the note.
Demand is still broad-based for the company's R&D segment and there is no obvious pull-forward driving H1 outperformance, the brokerage said. "H1 strength was broad-based with no pull-forward, and the FY R&D subscription raise reflects execution/improved visibility," analysts wrote.
The company's R&D segment has run above the roughly 17% compound annual growth rate within management's 2030 goals, so Veeva still has "some cushion for variability," the note said.
Meanwhile, the company's business consulting segment continues to drive growth while Vault CRM migrations are operating near peak levels which should sustain for another one to two years, the brokerage said.
Oppenheimer has an outperform rating on Veeva and $325 price target.
Veeva Systems shares were 5.1% higher in Thursday trading.
Price: 312.55, Change: +15.20, Percent Change: +5.11
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