Varonis Systems (VRNS) AI Stock Analysis

• Market Cap: $6.51B
• Dividend Yield: N/A
• Average Volume (3M): 1.45M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.01
• Revenue Growth: 14.29%
• EPS Growth: -14.42%
• Country: US
• Employees: 2,406
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.03
• Shares Outstanding: 112,047,110
• 10 Day Avg. Volume: 1,524,694
• 30 Day Avg. Volume: 1,454,586
• PEG Ratio: 7.94
• Price to Book (P/B): 10.89
• Price to Sales (P/S): 9.00
• P/FCF Ratio: 45.72
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 9.46
• Enterprise Value/Gross Profit: 11.62
• Enterprise Value/Ebitda: -78.27
• 1Y Price Target: $64.88
• Price Target Upside: 10.70% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 72 Outperform
• Price Target: $66.00 ▲(12.61% Upside)

Varonis Systems' overall stock score is driven by strong technical indicators and a stable financial performance, despite challenges in profitability and valuation. The company's strategic transition to a SaaS model and recent acquisitions position it well for future growth, although macroeconomic uncertainties and operational losses remain concerns.

Positive Factors

ARR Growth

Strong ARR growth indicates robust demand for Varonis' solutions, enhancing long-term revenue potential and market position.

Free Cash Flow

Increased free cash flow demonstrates effective cash management, providing resources for investment and reducing financial risk.

FedRAMP Authorization

FedRAMP Authorization opens new market opportunities in the federal sector, potentially driving significant long-term growth.

Negative Factors

Operating Loss

Operating losses indicate ongoing operational challenges, which may hinder profitability and require strategic adjustments.

Revenue Growth Headwinds

Revenue growth headwinds from SaaS sales recognition may slow short-term revenue, impacting financial performance.

Macro Environment Challenges

Challenging macro environment and deal scrutiny could limit growth opportunities and affect strategic execution.

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 shows solid revenue growth and improving cash flow, although profitability remains a challenge with ongoing net losses. The balance sheet is stable with strong liquidity, but equity levels have declined. The company shows potential for financial improvement if operational efficiencies are increased.

Income Statement

Varonis Systems has shown a consistent revenue growth, with a TTM revenue of $595.2M, up from $550.9M in the previous year. However, the company is still operating at a net loss, though the net loss has decreased from $95.8M to $14.4M. Gross profit margins are strong at 81.5% for TTM, but EBIT and EBITDA margins remain negative, indicating ongoing operational challenges.

Balance Sheet

The company's balance sheet reveals a reasonable debt-to-equity ratio of 2.17 in TTM, suggesting moderate leverage. Stockholders' equity has decreased, but cash reserves are strong at $770.9M. The equity ratio is 21.1%, indicating a balanced capital structure. While the financial stability is decent, the decline in equity requires attention.

Cash Flow

Varonis has improved its free cash flow from $108.5M to $124.8M in TTM, indicating positive cash flow growth. The operating cash flow to net income ratio is 9.45, revealing strong cash generation relative to net income. The company has demonstrated effective cash management, though capital expenditures are increasing.

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	-63.58M	-70.55M	-82.04M	-98.69M	-68.51M
Net Income	-102.93M	-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	1.27B	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: 58.61
• 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 58.61 is above the 20-day moving average (MA) of 57.38, above the 50-day MA of 56.31, and above the 200-day MA of 47.83, indicating a bullish trend. The MACD of 0.58 indicates Negative momentum. The RSI at 56.52 is Neutral, neither overbought nor oversold. The STOCH value of 56.76 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
ATEN	76 Outperform	1.32B	26.65	25.01%	1.32%	11.04%	18.70%
QLYS	74 Outperform	4.91B	26.97	36.41%	―	9.69%	9.50%
VRNS	72 Outperform	$6.51B	―	-25.73%	―	14.29%	-14.42%
AKAM	72 Outperform	10.93B	26.73	9.50%	―	3.98%	-31.18%
S	68 Neutral	6.07B	-13.74	-28.48%	―	25.39%	-42.90%
TENB	63 Neutral	3.62B	-78.90	-12.83%	―	11.41%	33.76%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Varonis Systems Corporate Events

Varonis Systems Acquires SlashNext to Boost Security

On September 2, 2025, Varonis Systems announced the acquisition of SlashNext, an AI-native email security provider, to enhance its data breach prevention capabilities. This acquisition is expected to expand Varonis’ total addressable market and improve its threat detection and response offerings, particularly in combating AI-driven phishing attacks. The financial outlook for Varonis includes updated guidance reflecting the acquisition’s expenses, with anticipated revenue growth and free cash flow for 2025.