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VARONIS SYSTEMS INC (VRNS) Stock Fundamental Analysis

NASDAQ:VRNS - Nasdaq - US9222801022 - Common Stock - Currency: USD

54.69  +1.31 (+2.45%)

After market: 54.69 0 (0%)

Fundamental Rating

3

VRNS gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. Both the profitability and financial health of VRNS have multiple concerns. VRNS shows excellent growth, but is valued quite expensive already.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

1.1 Basic Checks

In the past year VRNS was profitable.
VRNS had a positive operating cash flow in the past year.
VRNS had negative earnings in each of the past 5 years.
VRNS had a positive operating cash flow in 4 of the past 5 years.
VRNS Yearly Net Income VS EBIT VS OCF VS FCFVRNS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50M -50M 100M -100M

1.2 Ratios

With a Return On Assets value of -5.77%, VRNS perfoms like the industry average, outperforming 47.16% of the companies in the same industry.
Looking at the Return On Equity, with a value of -24.76%, VRNS is in line with its industry, outperforming 40.07% of the companies in the same industry.
Industry RankSector Rank
ROA -5.77%
ROE -24.76%
ROIC N/A
ROA(3y)-8.94%
ROA(5y)-10.86%
ROE(3y)-22.14%
ROE(5y)-37.18%
ROIC(3y)N/A
ROIC(5y)N/A
VRNS Yearly ROA, ROE, ROICVRNS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 -20 -40 -60 -80

1.3 Margins

The Gross Margin of VRNS (82.29%) is better than 89.36% of its industry peers.
In the last couple of years the Gross Margin of VRNS has remained more or less at the same level.
VRNS does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
Industry RankSector Rank
OM N/A
PM (TTM) N/A
GM 82.29%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.72%
GM growth 5Y-0.75%
VRNS Yearly Profit, Operating, Gross MarginsVRNS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40 60 80

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2

2. Health

2.1 Basic Checks

VRNS does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, VRNS has more shares outstanding
VRNS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, VRNS has a worse debt to assets ratio.
VRNS Yearly Shares OutstandingVRNS Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M 100M
VRNS Yearly Total Debt VS Total AssetsVRNS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

2.2 Solvency

An Altman-Z score of 2.48 indicates that VRNS is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.48, VRNS is in line with its industry, outperforming 53.19% of the companies in the same industry.
VRNS has a debt to FCF ratio of 5.98. This is a neutral value as VRNS would need 5.98 years to pay back of all of its debts.
VRNS has a Debt to FCF ratio (5.98) which is comparable to the rest of the industry.
VRNS has a Debt/Equity ratio of 1.23. This is a high value indicating a heavy dependency on external financing.
VRNS has a Debt to Equity ratio of 1.23. This is in the lower half of the industry: VRNS underperforms 76.60% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.23
Debt/FCF 5.98
Altman-Z 2.48
ROIC/WACCN/A
WACC10.68%
VRNS Yearly LT Debt VS Equity VS FCFVRNS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M 400M

2.3 Liquidity

A Current Ratio of 1.15 indicates that VRNS should not have too much problems paying its short term obligations.
VRNS's Current ratio of 1.15 is on the low side compared to the rest of the industry. VRNS is outperformed by 66.31% of its industry peers.
VRNS has a Quick Ratio of 1.15. This is a normal value and indicates that VRNS is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.15, VRNS is not doing good in the industry: 65.60% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.15
Quick Ratio 1.15
VRNS Yearly Current Assets VS Current LiabilitesVRNS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M

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7

3. Growth

3.1 Past

VRNS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.03%.
The Earnings Per Share has been growing by 35.72% on average over the past years. This is a very strong growth
VRNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.35%.
Measured over the past years, VRNS shows a quite strong growth in Revenue. The Revenue has been growing by 16.73% on average per year.
EPS 1Y (TTM)3.03%
EPS 3Y35.72%
EPS 5YN/A
EPS Q2Q%133.33%
Revenue 1Y (TTM)13.35%
Revenue growth 3Y12.2%
Revenue growth 5Y16.73%
Sales Q2Q%19.65%

3.2 Future

Based on estimates for the next years, VRNS will show a very strong growth in Earnings Per Share. The EPS will grow by 40.32% on average per year.
The Revenue is expected to grow by 13.10% on average over the next years. This is quite good.
EPS Next Y-43.35%
EPS Next 2Y11.49%
EPS Next 3Y25.97%
EPS Next 5Y40.32%
Revenue Next Year11.16%
Revenue Next 2Y13.82%
Revenue Next 3Y14.45%
Revenue Next 5Y13.1%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
VRNS Yearly Revenue VS EstimatesVRNS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 500M 1B
VRNS Yearly EPS VS EstimatesVRNS Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 0 1 2 3

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2

4. Valuation

4.1 Price/Earnings Ratio

VRNS is valuated quite expensively with a Price/Earnings ratio of 160.85.
VRNS's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 28.04. VRNS is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 146.65, VRNS can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, VRNS is valued a bit more expensive than the industry average as 61.35% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 37.64, VRNS is valued quite expensively.
Industry RankSector Rank
PE 160.85
Fwd PE 146.65
VRNS Price Earnings VS Forward Price EarningsVRNS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 50 100 150

4.2 Price Multiples

61.35% of the companies in the same industry are more expensive than VRNS, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 52.13
EV/EBITDA N/A
VRNS Per share dataVRNS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 1 2 3 4 5

4.3 Compensation for Growth

VRNS's earnings are expected to grow with 25.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y11.49%
EPS Next 3Y25.97%

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0

5. Dividend

5.1 Amount

VRNS does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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VARONIS SYSTEMS INC

NASDAQ:VRNS (7/25/2025, 8:00:01 PM)

After market: 54.69 0 (0%)

54.69

+1.31 (+2.45%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)05-06 2025-05-06/amc
Earnings (Next)07-29 2025-07-29/amc
Inst Owners108.57%
Inst Owner Change-0.03%
Ins Owners2.58%
Ins Owner Change5.03%
Market Cap6.12B
Analysts79.29
Price Target54.27 (-0.77%)
Short Float %9.39%
Short Ratio7.42
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)74.33%
Min EPS beat(2)27.78%
Max EPS beat(2)120.88%
EPS beat(4)4
Avg EPS beat(4)130.47%
Min EPS beat(4)27.78%
Max EPS beat(4)340.06%
EPS beat(8)7
Avg EPS beat(8)96.95%
EPS beat(12)10
Avg EPS beat(12)81.68%
EPS beat(16)14
Avg EPS beat(16)77.96%
Revenue beat(2)1
Avg Revenue beat(2)-2.81%
Min Revenue beat(2)-6.13%
Max Revenue beat(2)0.52%
Revenue beat(4)3
Avg Revenue beat(4)-0.19%
Min Revenue beat(4)-6.13%
Max Revenue beat(4)2.48%
Revenue beat(8)3
Avg Revenue beat(8)-1.53%
Revenue beat(12)3
Avg Revenue beat(12)-1.59%
Revenue beat(16)6
Avg Revenue beat(16)-0.89%
PT rev (1m)-4.32%
PT rev (3m)-3.46%
EPS NQ rev (1m)-15.35%
EPS NQ rev (3m)-67.79%
EPS NY rev (1m)1.1%
EPS NY rev (3m)-1.63%
Revenue NQ rev (1m)0.22%
Revenue NQ rev (3m)0.22%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.03%
Valuation
Industry RankSector Rank
PE 160.85
Fwd PE 146.65
P/S 10.68
P/FCF 52.13
P/OCF 48.4
P/B 16.64
P/tB 19.01
EV/EBITDA N/A
EPS(TTM)0.34
EY0.62%
EPS(NY)0.37
Fwd EY0.68%
FCF(TTM)1.05
FCFY1.92%
OCF(TTM)1.13
OCFY2.07%
SpS5.12
BVpS3.29
TBVpS2.88
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -5.77%
ROE -24.76%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 82.29%
FCFM 20.48%
ROA(3y)-8.94%
ROA(5y)-10.86%
ROE(3y)-22.14%
ROE(5y)-37.18%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.72%
GM growth 5Y-0.75%
F-Score4
Asset Turnover0.36
Health
Industry RankSector Rank
Debt/Equity 1.23
Debt/FCF 5.98
Debt/EBITDA N/A
Cap/Depr 85.19%
Cap/Sales 1.58%
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 1.15
Quick Ratio 1.15
Altman-Z 2.48
F-Score4
WACC10.68%
ROIC/WACCN/A
Cap/Depr(3y)65.78%
Cap/Depr(5y)79.18%
Cap/Sales(3y)1.55%
Cap/Sales(5y)2.16%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.03%
EPS 3Y35.72%
EPS 5YN/A
EPS Q2Q%133.33%
EPS Next Y-43.35%
EPS Next 2Y11.49%
EPS Next 3Y25.97%
EPS Next 5Y40.32%
Revenue 1Y (TTM)13.35%
Revenue growth 3Y12.2%
Revenue growth 5Y16.73%
Sales Q2Q%19.65%
Revenue Next Year11.16%
Revenue Next 2Y13.82%
Revenue Next 3Y14.45%
Revenue Next 5Y13.1%
EBIT growth 1Y6.49%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year-26.29%
EBIT Next 3Y61.11%
EBIT Next 5Y50.6%
FCF growth 1Y675.02%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y423.5%
OCF growth 3Y152.22%
OCF growth 5YN/A