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VARONIS SYSTEMS INC (VRNS) Stock Fundamental Analysis

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

51.81  -0.13 (-0.25%)

After market: 51.81 0 (0%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to VRNS. VRNS was compared to 282 industry peers in the Software industry. VRNS has a bad profitability rating. Also its financial health evaluation is rather negative. 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

VRNS had positive earnings in the past year.
In the past year VRNS had a positive cash flow from operations.
VRNS had negative earnings in each of the past 5 years.
Of the past 5 years VRNS 4 years had a positive operating cash flow.
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

VRNS has a Return On Assets (-5.77%) which is comparable to the rest of the industry.
VRNS has a Return On Equity (-24.76%) which is comparable to the rest of the 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
Compared to 5 years ago, VRNS has more shares outstanding
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 2.40 indicates that VRNS is not a great score, but indicates only limited risk for bankruptcy at the moment.
VRNS's Altman-Z score of 2.40 is in line compared to the rest of the industry. VRNS outperforms 51.42% of its industry peers.
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 in line with its industry peers.
VRNS has a Debt/Equity ratio of 1.23. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of VRNS (1.23) is worse than 76.60% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.23
Debt/FCF 5.98
Altman-Z 2.4
ROIC/WACCN/A
WACC10.62%
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.
With a Current ratio value of 1.15, VRNS is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
A Quick Ratio of 1.15 indicates that VRNS should not have too much problems paying its short term obligations.
VRNS's Quick ratio of 1.15 is on the low side compared to the rest of the industry. VRNS is outperformed by 65.96% of its industry peers.
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

The Earnings Per Share has been growing slightly by 3.03% over the past year.
The Earnings Per Share has been growing by 35.72% on average over the past years. This is a very strong growth
The Revenue has grown by 13.35% in the past year. This is quite good.
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

The Earnings Per Share is expected to grow by 40.32% on average over the next years. This is a very strong growth
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

The Price/Earnings ratio is 152.38, which means the current valuation is very expensive for VRNS.
Compared to the rest of the industry, the Price/Earnings ratio of VRNS is on the same level as its industry peers.
When comparing the Price/Earnings ratio of VRNS to the average of the S&P500 Index (27.69), we can say VRNS is valued expensively.
VRNS is valuated quite expensively with a Price/Forward Earnings ratio of 138.93.
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.
VRNS is valuated expensively when we compare the Price/Forward Earnings ratio to 37.36, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 152.38
Fwd PE 138.93
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

62.06% 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 49.38
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 (7/23/2025, 8:00:02 PM)

After market: 51.81 0 (0%)

51.81

-0.13 (-0.25%)

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 Cap5.80B
Analysts79.29
Price Target54.27 (4.75%)
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 152.38
Fwd PE 138.93
P/S 10.11
P/FCF 49.38
P/OCF 45.85
P/B 15.77
P/tB 18.01
EV/EBITDA N/A
EPS(TTM)0.34
EY0.66%
EPS(NY)0.37
Fwd EY0.72%
FCF(TTM)1.05
FCFY2.02%
OCF(TTM)1.13
OCFY2.18%
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 2.4
F-Score4
WACC10.62%
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