Varonis price target raised to $54 from $37 at Craig-Hallum

Craig-Hallum analyst Chad Bennett raised the firm’s price target on Varonis to $54 from $37 and keeps a Buy rating on the shares. Adoption of Varonis’ new SaaS offering continues to outpace expectations, the firm says. While the initial 2024 ARR, free cash flow, OPM, and EPS guidance might be “a head scratcher” to investors, Craig-Hallum offers up “a friendly reminder” that Varonis’ original guidance for 2023 was $518M in ARR and $23M of free cash flow and ended the year at $543M ARR and $54M in free cash flow. The firm believes the ARR guide for FY24 implying no real net new ARR growth year-over-year seems “dreadfully conservative” considering Phase 2 of the transition includes focused sales efforts on conversions starting in the second half of the year, the new MDDR offering will result in materially increases in ASP/ARR up-lift, and another year of SaaS traction should result in ample amount of upside to the 2024 ARR guide.