Varonis Systems' (NASDAQ:VRNS) growing losses don't faze investors as the stock advances 3.6% this past week

When you buy a stock there is always a possibility that it could drop 100%. But on a lighter note, a good company can see its share price rise well over 100%. Long term Varonis Systems, Inc. (NASDAQ:VRNS) shareholders would be well aware of this, since the stock is up 116% in five years. It's even up 3.6% in the last week.

The past week has proven to be lucrative for Varonis Systems investors, so let's see if fundamentals drove the company's five-year performance.

Check out our latest analysis for Varonis Systems

Given that Varonis Systems didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last 5 years Varonis Systems saw its revenue grow at 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 17% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. To our minds that makes Varonis Systems worth investigating - it may have its best days ahead.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Varonis Systems is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Varonis Systems stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

It's nice to see that Varonis Systems shareholders have received a total shareholder return of 70% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 17% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Varonis Systems better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Varonis Systems .

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com