Analyst Shaul Eyal of TD Cowen maintained a Buy rating on Varonis Systems, reducing the price target to $57.00.
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Shaul Eyal has given his Buy rating due to a combination of factors that highlight both challenges and opportunities for Varonis Systems. Despite a recent slowdown in federal and on-premises renewals, the company’s SaaS segment continues to show robust performance with expectations of maintaining over 20% annual growth. This positive outlook is supported by high renewal rates and strong gross margins, which contribute significantly to the company’s total annual recurring revenue.
In response to the recent challenges, Varonis has implemented strategic measures such as a 5% reduction in workforce and a share repurchase plan, reflecting a conservative approach to future guidance. These actions, along with the company’s commitment to completing its transition to a fully SaaS-based model by the end of 2026, underpin Eyal’s confidence in the company’s long-term growth potential, justifying the Buy rating despite the current headwinds.
In another report released today, Barclays also maintained a Buy rating on the stock with a $50.00 price target.