One-glance verdict
Within fair range
$69.87 our estimate vs market $46.41
Wall Street consensus: $50.68 (-27.5% lower than our fair-value estimate)
34% below our estimate
Fundamentals snapshot
Varonis Systems, Inc.
VRNS · NMS · Technology · Software - Infrastructure
Current price
$46.41
52-week range
$19.70 - $63.90
Market cap
$5.33B
Balance sheet
Healthy
-22.31x Concerning
Net cash $169.89M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Revenue grew 24.3% last year.
- Reward Free cash flow was positive in 7/10 years.
- Risk Return on equity was -36.0% last year — the company lost money on shareholders' equity.
What this company does
Varonis Systems, Inc.
Varonis Systems sells cybersecurity software that acts like a security guard for a company's sensitive data, like customer lists or financial records. It makes money by charging businesses subscription fees to use its software platform, which provides steady recurring revenue (income that is predictable and likely to continue in the future). This matters because as data breaches become more common and costly, protecting digital information is a critical and growing need for companies everywhere.
How the company got here
Varonis was started in 2005 by two founders, Yaki Faitelson and Ohad Korkus, who saw a big problem that most companies didn't realize they had. Businesses had massive amounts of digital files, like documents and spreadsheets, but no easy way to see who had access to them. After building their solution to map and protect this data, the company became publicly traded through an IPO (Initial Public Offering, the first time a company sells its shares to the public) in 2014. A major turning point came recently when Varonis shifted its entire business from selling software that customers installed on their own computers (known as on-premise software) to a subscription model delivered over the internet, called SaaS (Software-as-a-Service). This change makes their product easier for customers to use and gives Varonis more predictable, recurring revenue.
What it actually does
Think of Varonis as a high-tech security guard for a company's most important digital information. Its software platform automatically discovers where sensitive data, like customer lists or financial records, is stored across a company's network and cloud services. It then figures out who has access to that data and, more importantly, who *shouldn't* have access. The platform constantly watches for unusual activity, like an employee suddenly accessing thousands of files they've never touched before, and can alert the company to potential threats or data breaches.
Varonis Data Security Platform
The company has one primary business: selling access to its all-in-one data security software. Customers don't buy the software outright but pay a recurring subscription fee, similar to how you might pay for a streaming service. This subscription model, known as SaaS (Software-as-a-Service), now accounts for the vast majority of the company's business and is their sole focus for new customers. A very small and shrinking portion of its revenue comes from maintenance fees paid by older customers who still use Varonis software installed on their own servers. The company sells to a wide range of industries, including finance, healthcare, and government, that handle large amounts of sensitive data.
What management is betting on now
Varonis's main strategy is to get all its customers onto its modern, cloud-based subscription platform, which is more profitable and easier to update. A huge focus is on the rise of artificial intelligence; they are positioning their platform as a necessary tool to help companies adopt AI safely by ensuring these new technologies don't accidentally access and leak confidential data. The company is also continuously investing in new features and making strategic acquisitions (buying smaller tech companies) to protect against new threats and cover more types of data. Finally, they are working to automate more of their platform's functions, making it easier for companies with smaller security teams to reduce their data risk without needing a lot of manual effort.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$21.25M
FY2024 Q4
$19.92M
FY2025 Q1
$65.66M
FY2025 Q2
$17.97M
FY2025 Q3
$30.43M
FY2025 Q4
$20.74M
FY2026 Q1
$50.07M
FY2026 Q2
$20.70M
Revenue
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Net income
$-46.81M
Diluted EPS
-0.41
Operating cash flow
$25.08M
Free cash flow
$20.70M
Fetching…
Sources
Revenue
—
Net income
$-36.85M
Diluted EPS
-0.32
Operating cash flow
$55.04M
Free cash flow
$50.07M
Fetching…
Sources
Revenue
—
Net income
$-27.77M
Diluted EPS
-0.23
Operating cash flow
$24.68M
Free cash flow
$20.74M
Fetching…
Sources
Revenue
—
Net income
$-29.94M
Diluted EPS
-0.26
Operating cash flow
$33.40M
Free cash flow
$30.43M
Fetching…
Sources
Revenue
—
Net income
$-35.82M
Diluted EPS
-0.32
Operating cash flow
$21.35M
Free cash flow
$17.97M
Fetching…
Sources
Revenue
—
Net income
$-35.78M
Diluted EPS
-0.32
Operating cash flow
$68.00M
Free cash flow
$65.66M
Fetching…
Sources
Revenue
—
Net income
$-12.99M
Diluted EPS
-0.12
Operating cash flow
$24.27M
Free cash flow
$19.92M
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Sources
Revenue
—
Net income
$-18.33M
Diluted EPS
-0.16
Operating cash flow
$22.48M
Free cash flow
$21.25M
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Sources
Is it cheap or expensive?
Fair value $69.87 vs current price $46.41
Wall Street consensus is the average analyst price target: $50.68 (-27.5% lower than our fair-value estimate).
Our most-likely fair value is $69.87 a share — about 50.6% away from today's price of $46.41, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $169.9M - more cash than debt. Interest coverage -22.3x.
Net debt
$-169.89M
Interest coverage
-22.31x
Varonis Systems, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
VRNS
BASELINE
Varonis Systems, Inc.
Total debt $528.37M Interest coverage -22.31x This is the baseline the peer rows are being compared against.
Total debt $53.00M Interest coverage 38.25x This peer still has a real interest-payment cushion, while VRNS does not.
Total debt $820.18M Interest coverage -10.47x Neither company has much profit cushion over interest right now.
Total debt $421.56M Interest coverage -0.21x Neither company has much profit cushion over interest right now.
What you should know
The case for and against VRNS
2 Rewards
1 Risk
Rewards
-
Revenue grew 24.3% last year.
-
Free cash flow was positive in 7/10 years.
Risks
-
Return on equity was -36.0% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
112.44x
P/B
11.99x
P/S
7.75x
EV/EBITDA
-39.79x
PEG ratio
7.38x
Profitability
How much profit each dollar creates
Gross margin
77.1%
Operating margin
-22.6%
Net margin
-20.5%
ROE
-36.0%
ROA
-5.7%
Health
Liquidity and balance-sheet strength
Debt / equity
1.19x
Current ratio
1.65x
Quick ratio
1.40x
Total debt
$528.37M
Total cash
$698.27M
Growth
How the business has been compounding
Revenue TTM
$270.29M
Revenue 5Y CAGR
27.8%
EPS TTM
-1.22
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$138.21M
Free CF TTM
$134.80M
FCF margin
49.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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