A Look At Varonis Systems (VRNS) Valuation After Analyst Upgrades And AllTrue.ai Acquisition

Varonis Systems (VRNS) is back in focus after a cluster of analyst upgrades, the announced purchase of AllTrue.ai for US$125 million, and fresh earnings that topped market expectations despite ongoing securities class action lawsuits.

See our latest analysis for Varonis Systems.

Despite the recent analyst upgrades and the AllTrue.ai deal, Varonis' 30 day share price return of 24.34% and year to date share price return decline of 20.85%, alongside a 1 year total shareholder return decline of 42.49%, point to momentum that is still rebuilding after last year's sharp reset and ongoing class action headlines.

If this mix of AI driven security news and legal risk has your attention, it could be a good moment to see what else is out there with our screener of 58 profitable AI stocks that aren't just burning cash and compare how other names in the space are holding up.

With Varonis trading at a discount of roughly 35% to the average analyst price target and an estimated intrinsic value gap of about 47%, you have to ask: is this a reset opportunity, or is growth already fully priced in?

Most Popular Narrative: 25.8% Undervalued

Varonis last closed at $25.36, compared with a widely followed fair value narrative of $34.20, which rests heavily on its long term AI driven data security role.

Continued SaaS transition and high NRR (notably for SaaS customers), combined with robust upsell momentum across cloud and multi-cloud environments, enhance ARR visibility and predictability, driving durable earnings and margin expansion as the SaaS mix climbs and operational leverage improves post-transition.

Read the complete narrative.

Want to see what is really backing that fair value gap? The narrative refers to compound revenue growth, rising margins, and a future profit multiple that assumes meaningful execution. Curious which numbers anchor that view and how they fit together over the next few years?

Result: Fair Value of $34.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that gap could close quickly if the SaaS transition continues to pressure margins or if competition in data security forces heavier investment and weaker pricing power.

Find out about the key risks to this Varonis Systems narrative.

Another View: Multiples Paint A Tighter Picture

While the narrative and fair value work suggest Varonis is 46.9% below an estimated intrinsic value of $47.80, its current P/S ratio of 4.8x looks richer than both peers at 3.4x and the US Software average at 3.6x, and only slightly below a fair ratio of 5.1x. That mix hints at less obvious upside and more balance between potential opportunity and valuation risk. Which signal do you trust more?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Varonis Systems Narrative

If you think this story misses something or you simply prefer to work from the raw numbers yourself, you can build a custom thesis in minutes: Do it your way

A great starting point for your Varonis Systems research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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