This Cloud Computing Company Is A Better Pick Over Boston Scientific Stock – Trefis

We think thatVeeva Systems stock (NYSE: VEEV), a cloud-computing company focused on pharmaceutical and life sciences industry applications, currently is a better pick compared to Boston Scientific stock (NYSE:BSX), despite Veeva being the more expensive of the two. Veeva trades at about 23x trailing revenues, compared to just 5x for Boston Scientific. We are comparing these two companies given their similar operating income levels.

Both the stocks have underperformed with mid-single-digit growth year-to-date, compared to 22% growth for the broader S&P 500. While Boston Scientific saw a fall in demand for medical devices and supplies during the pandemic, due to fewer surgical procedures, Veevas business expanded with increased adoption of digital communication channels. In fact, Boston Scientifics revenue declined 8% during the pandemic, while Veevas revenue expanded a solid 28%. However, there is more to the comparison. Lets step back to look at the fuller picture of the relative valuation of the two companies by looking at historical revenue growth as well as operating margin growth. Our dashboard Boston Scientific vs Veeva:Similar Operating Income; Which Stock Is A Better Bet?has more details on this. Parts of the analysis are summarized below.

1. Veevas Revenue Growth Has Been Better

2. Veeva Is More Profitable

The Net of It All

Now that nearly 60% of the U.S. population is fully vaccinated against Covid-19, with overall economic activity picking up, the demand for medical devices and supplies is likely to rise going forward, boding well for Boston Scientific. For Veeva, a broader shift to digital communication is likely to pave way for continued growth for the company.

That said, Covid-19 is proving more difficult to contain than initially thought, due to the spread of more contagious virus variants and infections in some of the geographies, including Europe, are higher than what they were a few months back. The concerns around Omicron have spooked the markets at large with one confirmed case in the U.S. as well. If there is another large spike in Covid-19 cases from the new variant, it will disrupt economic recovery and impact sales as well as earnings growth of many companies. This may result in pressure on margins in the near term, especially for Boston Scientific.

Wondering how Boston Scientific peers stack up? Check out Boston Scientific Stock Comparison With Peers to see how BSX stock compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

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[1] Month-to-date and year-to-date as of 12/2/2021[2] Cumulative total returns since 2017

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This Cloud Computing Company Is A Better Pick Over Boston Scientific Stock - Trefis