VEEV WACC - Weighted Average Cost of Capital
The WACC of Veeva Systems Inc (VEEV) is 5.8%.
| Range | Selected | |
| Cost of equity | 5.4% - 8.9% | 7.15% |
| Tax rate | 8.0% - 13.0% | 10.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.0% - 6.6% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.34 | 0.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 8.9% |
| Tax rate | 8.0% | 13.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.0% | 6.6% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VEEV | Veeva Systems Inc | 0.97 | 0.86 | 0.46 |
| APYI | Aspyra Inc | 0.53 | 0.2 | 0.13 |
| CERT | Certara Inc | 0.15 | 1.28 | 1.13 |
| HCAT | Health Catalyst Inc | 1.32 | 1.1 | 0.5 |
| MITI | Mitesco Inc | 0.43 | -1.06 | -0.77 |
| MLKNA | MedLink International Inc | 0.45 | 1.22 | 0.87 |
| MPLN | Multiplan Corp | 12.06 | 2.05 | 0.17 |
| NH | NantHealth Inc | 29.54 | 0.4 | 0.01 |
| OMCL | Omnicell Inc | 0.28 | -0.02 | -0.01 |
| PHR | Phreesia Inc | 0.01 | 1.07 | 1.06 |
| TRHC | Tabula Rasa HealthCare Inc | 1.13 | 1.4 | 0.7 |
| Low | High | |
| Unlevered beta | 0.17 | 0.5 |
| Relevered beta | 0.01 | 0.58 |
| Adjusted relevered beta | 0.34 | 0.72 |
VEEV's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for VEEV:
cost_of_equity (7.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.