Varonis Systems (VRNS) AI Stock Analysis

• Market Cap: $4.17B
• Dividend Yield: N/A
• Average Volume (3M): 2.78M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.00
• Revenue Growth: 11.37%
• EPS Growth: -34.44%
• Country: US
• Employees: 2,406
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.06
• Shares Outstanding: 117,897,310
• 10 Day Avg. Volume: 6,068,673
• 30 Day Avg. Volume: 2,780,398
• 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: 1.54
• Enterprise Value/Revenue: 10.55
• Enterprise Value/Gross Profit: 13.18
• Enterprise Value/Ebitda: -70.61
• 1Y Price Target: $57.61
• Price Target Upside: 68.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 0.13
• Revenue Forecast (FY): $619.05M

• Rating: 44 Neutral
• Price Target: $34.00 ▼(-0.32% Downside)

Varonis Systems' overall stock score is primarily impacted by its mixed financial performance and bearish technical indicators. While the company shows strong revenue growth and cash flow generation, profitability issues and a negative P/E ratio weigh heavily on its valuation. Technical analysis indicates bearish momentum, with the stock trading below key moving averages and oversold conditions. These factors contribute to a lower overall stock score.

Positive Factors

SaaS Transition

The successful transition to a SaaS model enhances recurring revenue streams and aligns with industry trends, supporting long-term growth.

Strategic Partnerships

Partnerships with major tech firms like Microsoft expand Varonis' market reach and integrate advanced technologies, strengthening competitive positioning.

Cash Flow Improvement

Improving cash flow indicates effective cash management, providing financial flexibility for strategic investments and operational stability.

Negative Factors

On-Premises Challenges

Challenges in the on-premises business segment could hinder overall revenue growth and necessitate strategic shifts or restructuring.

Net Losses

Ongoing net losses highlight profitability challenges, potentially limiting reinvestment capabilities and affecting long-term financial health.

Equity Decline

Declining equity levels may impact financial stability and investor confidence, necessitating careful capital management to sustain growth.

Varonis Systems Business Overview & Revenue Model

Company Description

Varonis Systems, Inc. (VRNS) is a publicly traded cybersecurity and data management company headquartered in New York, specializing in protecting data and managing permissions across various platforms. Varonis provides solutions that help organizations secure their sensitive data, detect insider threats, and comply with data privacy regulations. The company's core products include data security and analytics platforms that monitor and analyze data activity, user behavior, and access controls.

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 consistent revenue growth and strong cash flow generation, but struggles with profitability. The balance sheet indicates improved leverage but low returns on equity. Overall, financial performance is mixed with strengths in revenue and cash flow, but weaknesses in profitability.

Income Statement

Varonis Systems shows a consistent revenue growth trend, with a TTM revenue growth rate of 2.27%. However, profitability remains a challenge, as indicated by negative EBIT and EBITDA margins, and a low net profit margin of 1.93% in TTM. The gross profit margin is strong at 80.04%, suggesting efficient cost management. Overall, while revenue is growing, the company struggles with profitability.

Balance Sheet

The balance sheet indicates a moderate debt-to-equity ratio of 0.85 in TTM, showing improved leverage compared to previous years. However, the return on equity is low at 2.65%, reflecting challenges in generating returns for shareholders. The equity ratio is not explicitly calculated, but the company appears to have a stable asset base. Overall, the balance sheet shows improved leverage but low returns.

Cash Flow

Varonis Systems demonstrates a positive trend in cash flow, with a free cash flow growth rate of 7.35% in TTM. The operating cash flow to net income ratio is 0.28, indicating a reasonable conversion of income to cash. The free cash flow to net income ratio is high at 91.13%, suggesting effective cash management. Overall, the cash flow statement reflects strong cash generation capabilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	608.68M	550.95M	499.16M	473.63M	390.13M	292.69M
Gross Profit	487.21M	457.10M	427.41M	403.80M	330.74M	248.43M
EBITDA	-90.93M	-63.58M	-70.55M	-82.04M	-80.15M	-61.71M
Net Income	-114.54M	-95.77M	-100.92M	-124.52M	-116.86M	-94.01M
Balance Sheet
Total Assets	1.67B	1.66B	1.10B	1.04B	1.11B	555.48M
Cash, Cash Equivalents and Short-Term Investments	707.92M	568.42M	533.72M	732.49M	807.61M	298.26M
Total Debt	520.67M	754.41M	311.84M	316.46M	302.82M	273.00M
Total Liabilities	1.06B	1.21B	614.26M	541.61M	511.94M	461.41M
Stockholders Equity	604.84M	455.66M	489.65M	502.13M	596.59M	94.07M
Cash Flow
Free Cash Flow	133.98M	108.51M	54.32M	475.00K	-3.31M	-15.96M
Operating Cash Flow	147.02M	115.20M	59.42M	11.87M	7.18M	-5.84M
Investing Cash Flow	-156.17M	-532.25M	-143.08M	-374.25M	54.38M	-54.75M
Financing Cash Flow	-115.71M	371.90M	-53.40M	-75.58M	510.11M	225.75M

Varonis Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 34.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRNS, the sentiment is Negative. The current price of 34.11 is below the 20-day moving average (MA) of 52.21, below the 50-day MA of 55.84, and below the 200-day MA of 49.18, indicating a bearish trend. The MACD of -6.74 indicates Positive momentum. The RSI at 21.94 is Positive, neither overbought nor oversold. The STOCH value of 8.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VRNS.

Varonis Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	77 Outperform	$5.24B	28.48	38.64%	―	9.95%	12.72%
ATEN	77 Outperform	$1.30B	26.57	23.88%	1.37%	10.27%	3.52%
AKAM	72 Outperform	$10.46B	25.88	9.21%	―	3.98%	-31.18%
S	62 Neutral	$5.63B	―	-27.34%	―	25.39%	-42.90%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TENB	61 Neutral	$3.30B	―	-8.95%	―	11.05%	45.23%
VRNS	44 Neutral	$4.17B	―	-22.17%	―	11.37%	-34.44%

Varonis Systems Corporate Events

Varonis Systems’ Earnings Call: SaaS Shines Amid On-Prem Challenges

Varonis Systems’ recent earnings call painted a picture of dual realities within the company. The sentiment was largely positive regarding the SaaS segment, which showcased strong performance and growth, driven by strategic partnerships and product expansions. However, this optimism was tempered by challenges in the on-premises business, necessitating financial guidance adjustments and operational restructuring. The contrast between the thriving SaaS segment and the struggling on-prem component was a central theme throughout the call.

Varonis Systems Reports Strong SaaS Growth Amid Strategic Shifts

Varonis Systems, Inc. is a leading data security company specializing in protecting critical data across various environments with its cloud-native Data Security Platform. The company focuses on automating security outcomes and defending against advanced threats using AI-powered automation.

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.

The most recent analyst rating on (VRNS) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Varonis Systems stock, see the VRNS Stock Forecast page.

Varonis Systems’ Earnings Call: Growth Amid Challenges

Varonis Systems’ recent earnings call painted a picture of robust growth tempered by some challenges. The company showcased impressive gains in Annual Recurring Revenue (ARR) and cash flow, primarily fueled by a successful transition to a Software-as-a-Service (SaaS) model and strategic partnerships. However, these positives were counterbalanced by an operating loss and macroeconomic headwinds that continue to pose challenges.