A confluence of positive factors could drive strong gains for Veeva Systems, a cloud-based software provider for the life sciences industry, according to Goldman Sachs. Goldman initiated coverage of the stock with a buy rating and a price target of $253 per share, which implies upside of about 34% from Wednesday's close. The company is poised to benefit from the combination of its more mature client relationship management (CRM) business, which Goldman views as its "competitive moat," and other faster-growing add-ons and expansion in R & D. "We believe the company is successfully leveraging its dominant position in CRM to cross-sell CRM add-ons and finance its efforts to expand into software for R & D use cases, where we expect to see increasing momentum over the next 2 years," analyst Gabriela Borges said in a note Wednesday. Veeva's CRM solution was its flagship product when the company launched in 2007 and was the primary driver of growth through the company's IPO in 2013. Borges also said Veeva's margins are "best in class" and that the firm expects free cash flow to be "mostly range bound" between 35% and 40%. "Veeva has already been able to execute 35-40% EBITDA and FCF margins while maintaining 25%+ growth, showing the strength of the business model and company execution," Borges said. "Going forward, we expect to see FCF grow essentially in line with revenue as Veeva continues to invest in new products that can drive revenue growth for years to come." She also added that Goldman analysts believe free cash flow margins for the CRM business are even higher than the corporate average of 40%. Shares of Veeva have struggled this year, falling more than 26% in that time. —CNBC's Michael Bloom contributed reporting.