Analyst Mike Cikos of Needham maintained a Buy rating on Varonis Systems, reducing the price target to $55.00.
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Mike Cikos has given his Buy rating due to a combination of factors that suggest potential for future growth despite current challenges. Varonis Systems experienced a slight miss in their annual recurring revenue (ARR) expectations and adjusted their guidance for the coming years. This adjustment was primarily due to unexpected declines in On-Premise Subscription Renewal rates towards the end of the quarter, which affected both federal and non-federal sectors.
Despite these setbacks, Cikos maintains a Buy rating, indicating confidence in the company’s long-term prospects. The decision to phase out the On-Premise Subscription offering by the end of 2026 and the implementation of cost-cutting measures, such as a reduction in workforce and scaling back federal market initiatives, are seen as strategic moves to stabilize and eventually enhance the company’s performance. Although the stock price has dropped significantly, the rating reflects an expectation that Varonis will improve its operational visibility and return to a growth trajectory.
In another report released today, TD Cowen also reiterated a Buy rating on the stock with a $57.00 price target.