William Blair analyst Jason Ader has reiterated their bullish stance on VRNS stock, giving a Buy rating today.
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Jason Ader has given his Buy rating due to a combination of factors that highlight both the challenges and potential of Varonis Systems. Despite the company’s recent underperformance in the third quarter, with results falling short of expectations across key metrics, the transition to a SaaS model is seen as a strategic move that positions Varonis well for future growth. The SaaS platform is expected to capitalize on the increasing demand for data security solutions, especially in the context of AI advancements.
While the on-premises subscription business has faced renewal softness, attributed to sales execution issues and heightened deal scrutiny, the SaaS segment continues to demonstrate robust growth. The decision to phase out the self-hosted solution by the end of 2026 underscores a commitment to this transition. Despite lowering full-year guidance, the company maintains a positive outlook, with management adopting a conservative approach to navigate current challenges while focusing on areas with higher returns.
In another report released today, TD Cowen also reiterated a Buy rating on the stock with a $57.00 price target.