Varonis Systems: Strong Q1 Performance and SaaS Transition Drive Buy Rating

William Blair analyst Jason Ader has reiterated their bullish stance on VRNS stock, giving a Buy rating on May 4.

Jason Ader has given his Buy rating due to a combination of factors that highlight Varonis Systems’ strong performance and promising outlook. The company reported significant beats in key metrics during the first quarter, with total Annual Recurring Revenue (ARR) and free cash flow exceeding expectations. This outperformance is largely driven by the increasing adoption of Varonis’ SaaS offerings, which have bolstered both new customer acquisition and the expansion of existing accounts.
Furthermore, Varonis raised its full-year ARR guidance, reflecting confidence in sustained growth despite macroeconomic challenges. The company’s transition to a SaaS model is progressing well, with expectations that SaaS will constitute a substantial portion of total ARR by the end of fiscal 2025. This strategic shift, coupled with robust demand for data security solutions, underpins the positive outlook and supports the Buy rating.

In another report released on May 4, Robert W. Baird also maintained a Buy rating on the stock with a $52.00 price target.