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Veeva: An Asymmetric Short

Dec. 06, 2018 12:00 PM ETVeeva Systems Inc. (VEEV)IQV53 Comments
Akram's Razor profile picture
Akram's Razor


  • In last month, IQVIA, has won 2 major CRM implementations at Top 10 Global Pharmas. This is notable as nobody but Veeva has won such business over the past 5yrs.
  • IQVIA's pharma CRM is built on the same Salesforce.com platform as Veeva. In fact, it leverages more expansive mature version of platform.
  • IQVIA has also announced that they launching a clinical focused product suite that competes with Veeva Vault in partnership with Salesforce.com Health Cloud.
  • Veeva trades at 16.5x FY 2019 EV/Sales guiding for 17% FY 2020 growth. It's the most expensive its ever been relative to SAAS peers.
  • I expect Veeva shares to decline by 30-50% over the next 12-18 months.
  • This idea was discussed in more depth with members of my private investing community, The Razor's Edge. Get started today »

I believe Veeva Systems stock is a very compelling short.

Veeva’s Shifting Competitive Landscape in Life Sciences CRM

In Q3 Veeva derived 52% of its total revenue and 56% of its subscription revenue from its commercial cloud division. 90%+ of the revenue in this division comes from Veeva CRM for Life Sciences. Veeva’s market share in this space as measured by top 50 pharma sales reps seats is in the 90%+ range.

Since Veeva went public in November of 2013, no CRM provider other than Veeva has won a major new flag in top 20 pharma. In fact, even Veeva hasn’t won a major new flag in the top 20 in two years because essentially, they have them all. There literally has been zero competition in the top 20 as Veeva progressively replaced legacy Siebel or Cegedim/Dendrite CRM systems with their Salesforce.com platform backed Life Sciences CRM solution. That narrative just changed.

In the last month, and for the first time since Veeva went public, a competitor has won major new CRM business at a top 20 pharmaceutical company. Actually, to be more precise, at two of the top 10 ranked global pharmaceutical companies by market capitalization. That competitor is IQVIA.

The first notable win was at Roche which is the world’s 3 rd largest pharma by market cap.

IQVIA (NYSE: IQV) today announced that the pharmaceuticals division of Roche (F. Hoffmann-La Roche Ltd) has selected IQVIA’s commercial technology suite for deployment across more than 100 markets. IQVIA’s Technologies suite includes the Orchestrated Customer Engagement (OCE) Sales/Marketing, Master Data Management (MDM), ePromo and Organization Manager applications and will be a key enabler for this industry leader’s efforts to transform commercial engagement.

The IQVIA Technologies suite will be leveraged to drive more meaningful customer engagement and interactions, and to better inform commercial

This article was written by

Akram's Razor profile picture
38 year old prop trader who loves to scour for great long and short investment ideas.

Analyst’s Disclosure: I am/we are short VEEV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

long salesforce.com

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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