Veeva Systems (VEEV  ) shares were up more than 14% following its better than expected Q1 earnings report. The company exceeded analysts' estimates on the top and bottom line and also issued full-year guidance that came in above analysts' expectations.

So far this year, Veeva's shares are down 26% as the stock has been a victim of the selloff in software, tech, and growth stocks. However, Veeva's earnings results show that the company's momentum remains intact. Also unlike many other tech stocks, there is no sign of a slowing in the 'new normal'.

This isn't too surprising as Veeva makes and sells software for healthcare and life science companies. These segments are less affected by an economic slowdown or change in monetary policy. Therefore, it's interesting to investigate whether the recent drop in Veeva's price is a buying opportunity.

Inside the Numbers

In Q1, Veeva reported $0.99 in earnings per share which exceeded analysts' estimates of $0.92 per share. Revenues also beat expectations at $505 million vs $496 million and was a 16% increase from last year.

Subscription sales account for the bulk of the company's revenues and increased 18% to $402.6 million. Software subscription sales tend to be stickier and have higher margins which is one factor in the outperformance of SaaS stocks over the last decade. Veeva's revenues may be even stickier given its clients are in the healthcare space where there is a wider and deeper moat due to regulations and companies being more risk-averse in the space.

The company also crossed an important milestone in crossing the $2 billion run rate level. For the full year, it forecasts adjusted earnings of $4.16 and $2.2 billion in revenue which was above analysts' expectations for $2.17 billion in revenue and $4.01 in EPS.

It's interesting that Veeva's stock dropped more than 20% following its previous earnings report which was similar but indicated that earnings growth would flatten in 2022 due to higher costs. However, the company's revenue growth and longer-term trajectory remain on track as evidenced by this recent report.

Further, the original proposition for owning VEEV remains intact. It's going to be one of the dominant companies in the healthcare IT space and that is a market that will continually expand but face lesser competition than other software stocks. For investors who continue to believe in this thesis, the recent correction could prove to be a great buying opportunity.