Fact based stock research
Varonis Systems (NasdaqGS:VRNS)

US9222801022

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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Varonis Systems stock research in summary

varonis.com

ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Varonis Systems (Systems Software, USA) shares have lower financial characteristics compared with similar stocks. Shares of Varonis Systems are low in value (priced high) with a consolidated Value Rank of 6 (worse than 94% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 68). ...read more

RECOMMENDATION: A Combined Rank of 1, is a sell recommendation based on Varonis Systems's financial characteristics. As the company Varonis Systems shows low value with an Obermatt Value Rank of 6 (94% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 68% of comparable companies (Obermatt Growth Rank is 68). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 18 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Varonis Systems, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	6
Growth Rank	68
Safety Rank	18
Combined Rank	1

Country	USA
Industry	Systems Software
Index	NASDAQ
Size class	Medium

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Varonis Systems

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	6	13	12	6
GROWTH
GROWTH	69	69	85	68
SAFETY
SAFETY	14	27	42	18
SENTIMENT
SENTIMENT	n/a	31	27	^new
360° VIEW
360° VIEW	n/a	15	24	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Varonis Systems is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	6	13	12	6
GROWTH
GROWTH	69	69	85	68
SAFETY
SAFETY	14	27	42	18
COMBINED
COMBINED	9	19	30	1

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Varonis Systems the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 6 (worse than 94% compared with alternatives), Varonis Systems shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Varonis Systems. Price-to-Sales is 26 which means that the stock price compared with what market professionals expect for future profits is higher than 74% of comparable companies, indicating a low value concerning Varonis Systems's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 17, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Varonis Systems. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 6 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 6, is a sell recommendation based on Varonis Systems's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Varonis Systems? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Varonis Systems? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Varonis Systems may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	23	38	27	26
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	6	6	9	6
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	24	42	30	17
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	6	13	12	6

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Varonis Systems; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 68 (better than 68% compared with alternatives), Varonis Systems shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Varonis Systems. Sales Growth has a rank of 57 which means that currently, professionals expect the company to grow more than 57% of its competitors. Capital Growth is also above 18% of competitors with a rank of 90, and Stock Returns with the rank of 72 is also an outperformance. Only Profit Growth is low with a rank of 18 which means that currently, professionals expect the company to grow its profits less than 82% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 68, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Varonis Systems is a good growth stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	81	77	49	57
PROFIT GROWTH
PROFIT GROWTH	42	98	69	18
CAPITAL GROWTH
CAPITAL GROWTH	n/a	27	72	90
STOCK RETURNS
STOCK RETURNS	82	25	87	72
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	69	69	85	68

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Varonis Systems.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% compared with alternatives), the company Varonis Systems has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Varonis Systems is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Varonis Systems and the other two below average. Refinancing is at 59, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. But Leverage is high with a rank of 31, meaning the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. Liquidity is also on the riskier side with a rank of 10, meaning the company generates less profit to service its debt than 90% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), Varonis Systems has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Varonis Systems are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Varonis Systems and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	65	13	40	31
REFINANCING
REFINANCING	31	83	71	59
LIQUIDITY
LIQUIDITY	3	12	14	10
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	14	27	42	18

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Varonis Systems and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	60	34	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	23	27	^new
MARKET PULSE
MARKET PULSE	n/a	48	48	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	31	27	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Varonis Systems.
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