UPDATE: Stifel Initiates Coverage on Veeva Systems Awaiting Stock Pullback

In a report published Monday, Stifel analyst Tom Roderick initiated coverage on Veeva Systems (NYSE: VEEV) with a Hold rating.

In the report, Stifel noted, “Veeva's IPO generated the level of anticipation typically reserved for high profile names such as Twitter, Splunk, Tableau, and Workday. After pricing at $20, well above the initial $12-$14 range, shares more than doubled (versus a 2.1% rise in the NASDAQ), and have remained at elevated levels, where VEEV currently trades at 22x CY14E revenue and 18x CY15E revenue. In short, we think this enthusiasm was and is warranted, as we are hard-pressed to recall a more impressive rise to prominence than VEEV's impressive six-year run. However, 22x revenues is 22x revenues, and making a case for substantial upside to the stock from the current $40 level requires more aggressive assumptions on both forward VEEV numbers and the sustainability of such lofty multiples across the space than we are willing to make. As such, we are launching coverage on VEEV with a Hold rating and will look for a pullback as an opportunity to hold a more constructive rating.”

Veeva Systems closed on Friday at $40.54.