Analysts at Stephens have initiated coverage on shares of Varonis Systems (NASDAQ: VRNS) with an equal weight rating and a target price of $40.00. This development was reported in a research note published on the morning of October 31, 2023, highlighting the company’s position within the competitive technology sector.
In addition to Stephens, several other firms have recently assessed Varonis Systems. Weiss Ratings reaffirmed a “sell (d-)” rating on October 8. Conversely, Barclays upgraded its price target from $62.00 to $70.00 on October 14, maintaining an “overweight” rating. Meanwhile, Susquehanna adjusted its target price down from $65.00 to $50.00 while issuing a “positive” rating on October 29. Additionally, Needham & Company LLC lowered its target from $70.00 to $55.00 but retained a “buy” rating on the stock, also on October 29. Lastly, Truist Financial confirmed a “buy” rating with a revised target of $50.00, down from its previous estimate of $70.00.
Overall, Varonis Systems has received attention from a mix of analysts, with sixteen rating the stock as a buy, six issuing a hold rating, and one providing a sell rating. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $58.80.
Latest Financial Performance and Analyst Expectations
Varonis Systems reported its quarterly earnings on October 28, 2023. The technology firm announced earnings per share (EPS) of $0.06, aligning with analyst expectations. Revenue for the quarter reached $161.58 million, slightly below the anticipated $166.47 million. The company’s return on equity was noted at a negative 21.91%, and its net margin stood at a negative 18.82%.
Despite the challenges, Varonis Systems saw a year-over-year revenue increase of 9.1%. Last year, the company recorded an EPS of $0.10 for the same quarter. For the upcoming fourth quarter of fiscal year 2025, the company has projected EPS between $0.020 and $0.04. Analysts anticipate that Varonis Systems will post an EPS of -0.83 for the current fiscal year.
Institutional Investment Trends
Recent trends in institutional investment indicate a strategic interest in Varonis Systems. Several hedge funds and institutional investors have modified their positions in recent months. Stephens Inc. AR increased its holdings by 1.9% during the third quarter, now owning 9,105 shares valued at approximately $523,000. Similarly, Inspire Investing LLC raised its stake by 2.9%, acquiring an additional 222 shares to reach a total of 7,878 shares worth around $453,000.
“95.65% of the stock is owned by institutional investors,”
a reflection of the confidence in Varonis Systems’ potential in the cybersecurity market. Other notable increases include Quarry LP, which raised its position by 31.8%, and Arizona State Retirement System, which increased its holdings by 0.9% during the same period.
Founded in 2005 and headquartered in New York City, Varonis Systems specializes in cybersecurity, focusing on the protection and management of unstructured data. The company’s flagship product, the Data Security Platform, provides advanced analytics to monitor file systems, email servers, collaboration platforms, and cloud storage. By continuously mapping and analyzing data permissions and user behavior, Varonis empowers organizations to detect insider threats and ensure compliance.
As Varonis Systems navigates the complexities of the technology sector, analysts will continue to monitor its performance, particularly in light of its recent earnings report and evolving market conditions.
