Investing in Varonis Systems (NASDAQ:VRNS) five years ago would have delivered you a 103% gain

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on a lighter note, a good company can see its share price rise well over 100%. For example, the Varonis Systems, Inc. (NASDAQ:VRNS) share price has soared 103% in the last half decade. Most would be very happy with that. And in the last month, the share price has gained 27%. We note that Varonis Systems reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for Varonis Systems

Because Varonis Systems made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

For the last half decade, Varonis Systems can boast revenue growth at a rate of 16% per year. Even measured against other revenue-focussed companies, that's a good result. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 15% per year, in that time. So it seems likely that buyers have paid attention to the strong revenue growth. To our minds that makes Varonis Systems worth investigating - it may have its best days ahead.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on Varonis Systems

A Different Perspective

We're pleased to report that Varonis Systems shareholders have received a total shareholder return of 89% over one year. That gain is better than the annual TSR over five years, which is 15%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for Varonis Systems that you should be aware of.

Varonis Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.