Varonis Systems (VRNS) AI Stock Analysis

• Market Cap: $5.65B
• Dividend Yield: N/A
• Average Volume (3M): 1.30M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• Revenue Growth: 13.34%
• EPS Growth: 13.71%
• Country: US
• Employees: 2,406
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Infrastructure
• EPS (TTM): <0.01
• Shares Outstanding: 111,924,960
• 10 Day Avg. Volume: 1,321,211
• 30 Day Avg. Volume: 1,302,156
• PEG Ratio: -7.77
• Price to Book (P/B): 5.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.51K
• Enterprise Value/Market Cap: 0.45
• Enterprise Value/Revenue: 1.17
• Enterprise Value/Gross Profit: 5.44
• Enterprise Value/Ebitda: -6.81
• 1Y Price Target: $53.62
• Price Target Upside: 8.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 64 Neutral
• Price Target: $54.00 ▲(9.53%Upside)

Varonis Systems' strong ARR growth and SaaS transition are key strengths, supported by robust cash flow management. However, profitability and valuation concerns, combined with overbought technical indicators, present risks. Positive corporate events contribute to a moderately favorable outlook.

Positive Factors

Financial Performance

Varonis delivered a clean Q1 beat across ARR, revenue, and FCF, driving the stock higher.

Product Demand

Strong demand for Varonis’s data security solution is driven by rising cyber threats and increased data sprawl across cloud and on-prem environments.

SaaS Transition

Varonis's ongoing SaaS transition is ahead of schedule, driving accelerated growth and improved profitability.

Negative Factors

Acquisition Impact

The Cyral acquisition is not expected to have any impact on ARR/revenue in FY25 and is expected to add $4 million to operational expenses.

Stock Performance

VRNS is down approximately 16.1% over the last six months, underperforming IGV by nearly 24 points.

Varonis Systems Business Overview & Revenue Model

Company Description

Varonis Systems, Inc. is a data security and analytics company specializing in protecting enterprise data from cyber threats and insider threats. Operating primarily in the cybersecurity sector, Varonis offers a suite of software solutions designed to secure sensitive data, detect and respond to data breaches, and ensure compliance with data protection regulations. Its core products include solutions for data governance, data protection, threat detection, and compliance management, which cater to a wide range of industries including finance, healthcare, and education.

How the Company Makes Money

Varonis Systems makes money primarily through the sale of its software solutions and related services. The company's revenue model is based on a subscription-based licensing model, where customers pay recurring fees for access to Varonis's software products and support services. Key revenue streams include software licenses, maintenance and support services, and professional services such as consulting and training. Varonis also leverages partnerships with value-added resellers, system integrators, and technology partners to expand its market reach and enhance its product offerings. These partnerships play a significant role in the company's ability to attract new customers and drive sales growth.

Varonis Systems Financial Statement Overview

Summary

Varonis Systems shows steady revenue growth and a strong cash position, despite profitability challenges with a negative net profit margin and high leverage. The ability to generate free cash flow is a notable strength.

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
573.35M	550.95M	499.16M	473.63M	390.13M	292.69M
	Gross Profit
471.83M	457.10M	427.41M	403.80M	330.74M	248.43M
	EBIT
-116.93M	-117.65M	-117.22M	-121.23M	-98.69M	-78.42M
	EBITDA
-95.54M	-63.58M	-70.55M	-82.04M	-98.69M	-68.51M
	Net Income Common Stockholders
-91.06M	-95.77M	-100.92M	-124.52M	-116.86M	-94.01M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
609.22M	568.42M	533.72M	732.49M	807.61M	298.26M
	Total Assets
1.58B	1.66B	1.10B	1.04B	1.11B	555.48M
	Total Debt
742.22M	754.41M	311.84M	316.46M	294.02M	273.00M
	Net Debt
589.11M	568.82M	81.10M	-51.34M	-511.74M	38.91M
	Total Liabilities
1.21B	1.21B	614.26M	541.61M	511.94M	461.41M
	Stockholders Equity
367.74M	455.66M	489.65M	502.13M	596.59M	94.07M
Cash Flow		Free Cash Flow
117.42M	108.51M	54.32M	475.00K	-3.31M	-15.96M
	Operating Cash Flow
126.48M	115.20M	59.42M	11.87M	7.18M	-5.84M
	Investing Cash Flow
-445.31M	-532.25M	-143.08M	-374.25M	54.38M	-54.75M
	Financing Cash Flow
324.88M	371.90M	-53.40M	-75.58M	510.11M	225.75M

Varonis Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 49.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 49.3 is above the 20-day moving average (MA) of 48.24, above the 50-day MA of 44.60, and above the 200-day MA of 47.75, indicating a bullish trend. The MACD of 1.60 indicates Positive momentum. The RSI at 65.74 is Neutral, neither overbought nor oversold. The STOCH value of 68.05 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
QLYS	78 Outperform	$5.09B	28.75	40.23%	―	9.58%	12.41%
BOX	76 Outperform	$5.28B	27.86	152.34%	―	4.88%	80.94%
VRNS	64 Neutral	$5.65B	―	-22.21%	―	13.34%	13.71%
S	64 Neutral	$6.04B	―	-26.98%	―	32.25%	20.56%
TENB	63 Neutral	$3.96B	―	-12.09%	―	11.79%	35.35%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%
RPD	59 Neutral	$1.54B	59.44	164.75%	―	6.19%	―

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.