Veeva Systems Inc. (VEEV)

Veeva’s Economic Moats

Switching Costs

  • Imagine a pharma company trying to change platforms…
    • Data migration from old to new. Carries risks. May be time consuming. Interrupt workflow.
    • Customization of the new solution to the business.
    • Training of staff.
  • This is both expensive and risky. Meaning once a pharma business has installed Veeva into their business, they need extremely compelling reasons to change it.
  • Here’s the best part: 19 of the 20 top LS businesses have installed Veeva. Notable customers include Pfizer, Novartis, Merck, Bayer, Gilead.
  • VEEV software solutions are deeply (and increasingly) embedded into customer systems. 
  • High retention, continued development of new applications, increasing penetration within existing customers.
  • High financial cost and learning curve to switch vendors. Risking unplanned downtime, a system breach, or data loss. Can prove catastrophic.
  • Increased number of touch points within an organization reinforces switch costs. 

Intangible Assets – Brand

  • Veeva brand embodies High-Level Domain Expertise, providing world-class software solutions and customer service.

Conclusion – Price Implied Expectations (Apr 2020)

Given a TAM estimate of $12bn, the current market cap of VEEV implies that sales will grow to ~$7bn by 2029.

For the full report, see link below

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