Analysts Are Updating Their Varonis Systems, Inc. (NASDAQ:VRNS) Estimates After Its Yearly Results

It's been a sad week for Varonis Systems, Inc. (NASDAQ:VRNS), who've watched their investment drop 11% to US$40.59 in the week since the company reported its yearly result. Varonis Systems reported revenues of US$551m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.86 per share, which were slightly larger than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Varonis Systems

Taking into account the latest results, the consensus forecast from Varonis Systems' 21 analysts is for revenues of US$621.2m in 2025. This reflects a meaningful 13% improvement in revenue compared to the last 12 months. Per-share losses are predicted to creep up to US$0.89. Before this earnings announcement, the analysts had been modelling revenues of US$629.2m and losses of US$0.74 per share in 2025. So it's pretty clear the analysts have mixed opinions on Varonis Systems even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase in per-share losses.

The consensus price target held steady at US$54.81, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Varonis Systems analyst has a price target of US$67.00 per share, while the most pessimistic values it at US$38.12. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Varonis Systems' revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2025 being well below the historical 16% p.a. growth over the last five years. Compare this to the 425 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. So it's pretty clear that, while Varonis Systems' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Varonis Systems. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Varonis Systems going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Varonis Systems you should be aware of.

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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.