DB:VS2

Stock Analysis Report

Varonis Systems

Executive Summary

Varonis Systems, Inc. provides software products and services that allow enterprises to manage, analyze, and secure enterprise data.

Rewards

Trading at 23.8% below its fair value

Revenue is forecast to grow 13.09% per year

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Excellent balance sheet and slightly overvalued.


Similar Companies

International Business Machines

NYSE:IBM

Share Price & News

How has Varonis Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VS2's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.5%

VS2

1.5%

DE Software

0.7%

DE Market


1 Year Return

68.4%

VS2

37.4%

DE Software

15.6%

DE Market

Return vs Industry: VS2 exceeded the German Software industry which returned 39.3% over the past year.

Return vs Market: VS2 exceeded the German Market which returned 17.1% over the past year.


Shareholder returns

VS2IndustryMarket
7 Day1.5%1.5%0.7%
30 Day10.3%4.4%1.7%
90 Day35.9%6.9%6.3%
1 Year68.4%68.4%39.2%37.4%19.2%15.6%
3 Year182.4%182.4%63.2%56.6%18.3%7.9%
5 Year151.6%151.6%141.0%123.8%26.8%9.4%

Price Volatility Vs. Market

How volatile is Varonis Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Varonis Systems undervalued compared to its fair value and its price relative to the market?

22.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VS2 (€76.45) is trading below our estimate of fair value (€100.27)

Significantly Below Fair Value: VS2 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VS2 is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: VS2 is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate VS2's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: VS2 is overvalued based on its PB Ratio (26x) compared to the DE Software industry average (3.1x).


Next Steps

Future Growth

How is Varonis Systems forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VS2 is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: VS2 is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: VS2 is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: VS2's revenue (13.1% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: VS2's revenue (13.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VS2's Return on Equity is forecast to be low in 3 years time (5%).


Next Steps

Past Performance

How has Varonis Systems performed over the past 5 years?

-16.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VS2 is currently unprofitable.

Growing Profit Margin: VS2 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: VS2 is unprofitable, and losses have increased over the past 5 years at a rate of -16.9% per year.

Accelerating Growth: Unable to compare VS2's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: VS2 is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (14.6%).


Return on Equity

High ROE: VS2 has a negative Return on Equity (-58.96%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Varonis Systems's financial position?


Financial Position Analysis

Short Term Liabilities: VS2's short term assets ($198.3M) exceed its short term liabilities ($133.7M).

Long Term Liabilities: VS2's short term assets ($198.3M) exceed its long term liabilities ($66.7M).


Debt to Equity History and Analysis

Debt Level: VS2 is debt free.

Reducing Debt: VS2 has not had any debt for past 5 years.


Balance Sheet

Inventory Level: VS2 has a high level of physical assets or inventory.

Debt Coverage by Assets: VS2's debt is not covered by short term assets (assets are -1.3953910864198E+16x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: VS2 has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if VS2 has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Varonis Systems's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.5%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate VS2's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate VS2's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if VS2's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VS2's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VS2's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

What is the CEO of Varonis Systems's salary, the management and board of directors tenure and is there insider trading?

8.4yrs

Average management tenure


CEO

Yaki Faitelson (44yo)

16yrs

Tenure

US$8,770,972

Compensation

Mr. Yakov Faitelson, also known as Yaki, Co-founded Varonis Systems, Inc. in 2004 and has been its Chairman, Chief Executive Officer and President since 2004. Mr. Faitelson is responsible for leading the m ...


CEO Compensation Analysis

Compensation vs Market: Yaki 's total compensation ($USD8.77M) is above average for companies of similar size in the German market ($USD2.07M).

Compensation vs Earnings: Yaki 's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

8.4yrs

Average Tenure

43yo

Average Age

Experienced Management: VS2's management team is seasoned and experienced (8.4 years average tenure).


Board Age and Tenure

7.0yrs

Average Tenure

59yo

Average Age

Experienced Board: VS2's board of directors are considered experienced (7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.7%.


Management Team

  • Ohad Korkus (40yo)

    Co-Founder & Director

    • Tenure: 13yrs
    • Compensation: US$234.89k
  • Yaki Faitelson (44yo)

    Co-Founder

    • Tenure: 16yrs
    • Compensation: US$8.77m
  • Jim O'Boyle (55yo)

    Senior Vice President of Worldwide Sales

    • Tenure: 14yrs
    • Compensation: US$3.27m
  • Dana Shahar-Gara (45yo)

    Chief Human Resources Officer

    • Tenure: 1.7yrs
  • Gilad Raz (43yo)

    Chief Information Officer & VP of Technical Services

    • Compensation: US$1.49m
  • David Bass (41yo)

    Executive VP of Engineering & CTO

    • Tenure: 1.8yrs
    • Compensation: US$3.25m
  • Seth Gerson

    VP & General Counsel

    • David Gibson

      Chief Marketing Officer

      • James Arestia

        Director of Investor Relations

        • Guy Melamed (39yo)

          CFO & COO

          • Tenure: 2.8yrs
          • Compensation: US$3.76m

        Board Members

        • Rona Segev-Gal (49yo)

          Independent Director

          • Tenure: 15.1yrs
          • Compensation: US$228.52k
        • Kevin Comolli (59yo)

          Independent Director

          • Tenure: 15.1yrs
          • Compensation: US$238.02k
        • Fred Van Den Bosch (72yo)

          Independent Director

          • Tenure: 7yrs
          • Compensation: US$227.52k
        • John Gavin (64yo)

          Lead Independent Director

          • Tenure: 1yrs
          • Compensation: US$243.52k
        • Tom Mendoza (68yo)

          Independent Director

          • Tenure: 4.6yrs
          • Compensation: US$220.02k
        • Ofer Segev (60yo)

          Independent Director

          • Tenure: 4.9yrs
          • Compensation: US$227.52k
        • Ohad Korkus (40yo)

          Co-Founder & Director

          • Tenure: 13yrs
          • Compensation: US$234.89k
        • Yaki Faitelson (44yo)

          Co-Founder

          • Tenure: 16yrs
          • Compensation: US$8.77m
        • Gili Iohan (44yo)

          Director

          • Tenure: 2.8yrs
          • Compensation: US$220.02k

        Company Information

        Varonis Systems, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Varonis Systems, Inc.
        • Ticker: VS2
        • Exchange: DB
        • Founded: 2004
        • Industry: Systems Software
        • Sector: Software
        • Market Cap: US$2.599b
        • Listing Market Cap: US$2.345b
        • Shares outstanding: 30.48m
        • Website: https://www.varonis.com

        Number of Employees


        Location

        • Varonis Systems, Inc.
        • 1250 Broadway
        • 29th Floor
        • New York City
        • New York
        • 10001
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        VRNSNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDFeb 2014
        VS2DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 2014
        0VOULSE (London Stock Exchange)YesCommon StockGBUSDFeb 2014

        Biography

        Varonis Systems, Inc. provides software products and services that allow enterprises to manage, analyze, and secure enterprise data. Its software allows enterprises to protect data stored on premises and in the cloud, including sensitive files and emails; confidential customer, and patient and employee data; financial records; strategic and product plans; and other intellectual property. The company offers DatAdvantage that captures, aggregates, normalizes, and analyzes every data access event for users on Windows and UNIX/Linux servers, storage devices, email systems, and Intranet servers; and DatAlert that profiles users and their behaviors related to systems and data, detects and alerts on deviations to established baselines, and provides a Web-based dashboard and investigative interface. It also provides Data Classification Engine that identifies and tags data based on criteria set in various metadata dimensions, and provides business and information technology (IT) personnel with actionable intelligence about data; and DataPrivilege, which provides a self-service Web portal that allows users to request access to data necessary for their business functions, and owners to grant access without IT intervention. In addition, the company offers Data Transport Engine, which provides an execution engine that unifies the manipulation of data and metadata, translating business decisions, and instructions into technical commands, such as data migration or archiving; and DatAnswers that provides search functionality for enterprise data. It sells its products and services through a network of distributors and value added resellers. The company serves IT and business personnel. Varonis Systems, Inc. was incorporated in 2004 and is headquartered in New York City, New York. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/20 22:00
        End of Day Share Price2020/01/20 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.