Varonis Systems (VRNS) AI Stock Analysis

• Market Cap: $6.37B
• Dividend Yield: N/A
• Average Volume (3M): 1.61M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.02
• Revenue Growth: 14.29%
• EPS Growth: -14.42%
• Country: US
• Employees: 2,406
• Sector: Technology
• Sector Strength: 97
• Industry: Software - Infrastructure
• EPS (TTM): 0.03
• Shares Outstanding: 112,047,110
• 10 Day Avg. Volume: 1,822,741
• 30 Day Avg. Volume: 1,607,597
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 9.46
• Enterprise Value/Gross Profit: 11.62
• Enterprise Value/Ebitda: -78.27
• 1Y Price Target: $62.18
• Price Target Upside: 7.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 72 Outperform
• Price Target: $62.00 ▲(6.71% Upside)

Varonis Systems' overall score is driven by strong financial and earnings performance, with robust ARR growth and positive market sentiment despite ongoing net losses. Technical indicators suggest short-term strength, although valuation remains a challenge.

Positive Factors

Financial Performance

The company delivered strong 2Q25 results with ARR growing 19% year-over-year, exceeding expectations.

Revenue Growth

Varonis is well-positioned to capitalize on the growing adoption of Agentic AI, which should enable significant revenue growth and drive shares higher.

Strategic Partnerships

The strategic partnership with Microsoft is expected to enhance Varonis Systems' capabilities in securing workplace AI.

Negative Factors

Competitive Landscape

The data security market may intensify the competitive landscape as it attracts investment from both established players and emerging vendors.

Profitability Challenges

Lower profitability targets reflect operational expense headwinds and increased hosting costs due to the SaaS transition.

Varonis Systems Business Overview & Revenue Model

Company Description

Varonis Systems, Inc. provides software products and services that allow enterprises to manage, analyze, alert, and secure enterprise data in North America, Europe, the Middle East, Africa, and internationally. Its software enables enterprises to protect data stored on premises and in the cloud, including sensitive files and emails; confidential personal data belonging to customers, and patients and employees' data; financial records; strategic and product plans; and other intellectual property. The company offers DatAdvantage that captures, aggregates, normalizes, and analyzes every data access event for users on Windows and UNIX/Linux servers, storage devices, email systems, Intranet servers, cloud applications, and data stores; and DatAlert that profiles users, devices, and their behaviors related to systems and data, detects and alerts on deviations that indicate compromise, and provides a Web-based dashboard and investigative interface. It also provides Data Classification Engine that identifies and tags data based on criteria set in various metadata dimensions, as well as provides business and information technology (IT) personnel with actionable intelligence about data; and DataPrivilege, which offers a self-service Web portal that allows users to request access to data necessary for their business functions, and owners to grant access without IT intervention. In addition, the company provides Data Transport Engine, which provides an execution engine that unifies the manipulation of data and metadata, translating business decisions, and instructions into technical commands, such as data migration or archiving; and DatAnswers that offers search functionality for enterprise data. Varonis Systems, Inc. sells products and services through a network of distributors and resellers. The company serves IT, security, and business personnel. Varonis Systems, Inc. was incorporated in 2004 and is headquartered in New York, New York.

How the Company Makes Money

Varonis generates revenue primarily through the sale of its software solutions and subscription services. The company's revenue model is largely based on a combination of software licenses, annual maintenance and support services, and subscription fees for its cloud-based offerings. Key revenue streams include the sale of perpetual licenses and subscription-based licenses for their data security products. Additionally, Varonis benefits from its partnerships with various technology firms and resellers, which help expand its market reach and enhance its offerings. The company also invests in ongoing customer support and education services, ensuring customer retention and recurring revenue.

Varonis Systems Financial Statement Overview

Summary

Varonis Systems demonstrates positive revenue growth and a strong cash position, vital for its operations amid profitability challenges. Despite significant leverage and negative profit margins, the company's ability to generate cash flow is a notable strength, suggesting potential for improvement with enhanced operating efficiencies.

Income Statement

Varonis Systems shows steady revenue growth with a 4.06% increase from the previous year and a robust gross profit margin of 82.28% for TTM (Trailing-Twelve-Months). However, the company continues to face profitability challenges, as indicated by a negative net profit margin of -15.88% and negative EBIT and EBITDA margins, primarily driven by substantial operating expenses.

Balance Sheet

The balance sheet reflects moderate financial health with a debt-to-equity ratio of 2.02, illustrating significant leverage. The equity ratio stands at 23.32%, indicating a moderate proportion of financing from equity. Despite these challenges, the company maintains a strong cash position, which is crucial for its ongoing operations.

Cash Flow

Varonis Systems demonstrates strong cash flow management, with positive operating cash flow to net income ratio of 1.39 and a free cash flow to net income ratio of 1.29. Free cash flow has grown significantly by 8.20% over the year, showcasing the company's ability to generate cash despite profitability issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	595.17M	550.95M	499.16M	473.63M	390.13M	292.69M
Gross Profit	484.84M	457.10M	427.41M	403.80M	330.74M	248.43M
EBITDA	-71.97M	-67.31M	-70.55M	-82.04M	-98.69M	-68.51M
Net Income	-14.41M	-95.77M	-100.92M	-124.52M	-116.86M	-94.01M
Balance Sheet
Total Assets	1.62B	1.66B	1.10B	1.04B	1.11B	555.48M
Cash, Cash Equivalents and Short-Term Investments	770.86M	568.42M	533.72M	732.49M	807.61M	298.26M
Total Debt	742.26M	754.41M	311.84M	316.46M	294.02M	273.00M
Total Liabilities	502.12M	1.21B	614.26M	541.61M	511.94M	461.41M
Stockholders Equity	341.50M	455.66M	489.65M	502.13M	596.59M	94.07M
Cash Flow
Free Cash Flow	124.81M	108.51M	54.32M	475.00K	-3.31M	-15.96M
Operating Cash Flow	136.10M	115.20M	59.42M	11.87M	7.18M	-5.84M
Investing Cash Flow	-370.35M	-532.25M	-143.08M	-374.25M	54.38M	-54.75M
Financing Cash Flow	278.08M	371.90M	-53.40M	-75.58M	510.11M	225.75M

Varonis Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 58.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRNS, the sentiment is Positive. The current price of 58.1 is above the 20-day moving average (MA) of 54.29, above the 50-day MA of 51.89, and above the 200-day MA of 46.96, indicating a bullish trend. The MACD of 1.38 indicates Negative momentum. The RSI at 64.46 is Neutral, neither overbought nor oversold. The STOCH value of 67.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VRNS.

Varonis Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BOX	76 Outperform	$4.50B	24.09	152.34%	―	4.88%	80.94%
QLYS	75 Outperform	$4.67B	25.79	39.53%	―	9.69%	9.50%
VRNS	72 Outperform	$6.37B	―	-25.73%	―	14.29%	-14.42%
S	64 Neutral	$5.42B	―	-26.98%	―	28.19%	-31.34%
Sector *	61 Neutral	$36.32B	7.12	-7.26%	1.97%	7.79%	-9.36%
TENB	60 Neutral	$3.46B	―	-12.60%	―	11.41%	33.76%
RPD	56 Neutral	$1.30B	51.04	155.46%	―	4.67%	―

Varonis Systems Corporate Events

Varonis Systems Approves Key Proposals at Annual Meeting

On June 5, 2025, Varonis Systems, Inc. held its 2025 Annual Meeting of Stockholders, where several key proposals were approved. The stockholders approved the 2025 Employee Stock Purchase Plan and an increase in the number of shares available under the 2023 Omnibus Equity Incentive Plan, reflecting strategic moves to enhance employee engagement and shareholder value. Additionally, the election of directors, executive compensation, and the appointment of an independent accounting firm were ratified, indicating strong shareholder support for the company’s governance and financial oversight.

The most recent analyst rating on (VRNS) stock is a Buy with a $65.00 price target. To see the full list of analyst forecasts on Varonis Systems stock, see the VRNS Stock Forecast page.