Workday Vs. Veeva Systems: Which Cloud Stock Is A Better Buy?

Profitability      

WDAY’s trailing-12-month revenue is almost three times VEEV’s. WDAY is also more profitable, with a 72.7% gross profit margin versus VEEV’s 72.1%.

Also, WDAY’s 31.8% levered free cash flow margin compares favorably with VEEV’s 28.9%.

Valuation

In terms of forward non-GAAP PEG, VEEV is currently trading at 6.08x, 167.2% higher than WDAY, which is currently trading at 3.20x. Also, its 28.36x trailing-12-month EV/Sales is 102% higher than WDAY’s 14.04x.

VEEV is also more expensive both in terms of trailing-12-month Price/Sales (29.16x versus 13.99x) and trailing-12-month Price/Cash flow (78.29x versus 48.81x).

So, WDAY is cheaper than VEEV.

POWR Ratings

WDAY has an overall B rating, which equates to a Buy in our proprietary POWR Ratings system. However, VEEV has an overall C rating, which translates to Neutral. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

In terms of Growth Grade, WDAY has an A, which is consistent with its earnings and revenue growth. In contrast, VEEV has a Growth Grade of C.

Both VEEV and WDAY have B grades for Sentiment, in sync with analysts’ expectations that their revenue and EPS will increase.

Among 119 stocks in the D-rated Software – Application industry, WDAY is ranked #23. VEEV is ranked #25 of 80 stocks in the C-rated Medical – Services industry.

Beyond what we’ve highlighted, our POWR Ratings system has also rated both WDAY and VEEV for Momentum, Quality, Stability, and Value. Get all WDAY ratings here. Also, click here to see the additional POWR Ratings for VEEV.

The Winner

Since most industries are now rapidly adopting cloud-based systems in response to an evolving world, WDAY and VEEV can be considered good long-term investments given their market dominance in the cloud space. However, WDAY has an advantage here given its accelerated new bookings growth and significant pipeline improvement. In fact, we think its lower valuation coupled with its high earnings estimates makes it a much more lucrative investment than VEEV.

View single page >> |

Disclaimer: Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use, please ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.