Bullish case
$55 to $70
More likely if SaaS ARR excluding conversions sustains growth near 25%, GAAP losses narrow toward breakeven, AI security demand accelerates, and the market assigns a forward sales multiple closer to 8 to 9x.
Varonis Systems, Inc. research snapshot
VRNS AI Stock Analysis
VRNS AI stock analysis reads Varonis Systems as a specialized data and AI security platform whose SaaS transition is working but whose stock still trades at a premium multiple. At the August 3, 2026 cutoff, the latest verified close used here was $39.95, market capitalization was about $4.59 billion, and the AI score is 63 out of 100. The Q2 2026 report, released July 28, showed revenue up 18.3% year over year to $180.0 million and non-GAAP EPS of $0.04 versus a $0.01 consensus, and management raised full-year guidance on SaaS ARR and free cash flow. The stock still fell about 8% on the results because billings declined 1.5% year over year, some large deals slipped at quarter end, gross margin compressed to 77.7%, and year-to-date free cash flow came in below last year. This is informational research and not investment advice.
Current price
$39.95
Market cap
$4.59 billion
AI score
63 / 100
Rating
Improved SaaS growth and raised guidance, offset by premium valuation and GAAP losses
Trend status
Price holds above the 50-day and 200-day moving averages after a post-earnings pullback, still far below the 52-week high
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
Research quality check
- information Richness
- B-level information richness. VRNS has been public since 2014, has 24 covering analysts, and has dense SEC filing coverage, but as a mid-cap cybersecurity name it receives less mainstream media attention than larger peers.
- bias Check
- The main AI bias risk is treating one strong non-GAAP quarter as proof of a durable profitability regime, or reading the post-earnings stock drop as a fundamental failure. This page separates filing-backed facts from scenario judgments and notes that GAAP losses, falling billings, and a compressed gross margin are real counterweights to the beat.
- ai Confidence
- Medium-high data confidence for financial statements, market math, and analyst consensus; medium for scenario forecasting given the lumpy enterprise sales cycle and the still-negative GAAP bottom line.
- investment Certainty
- Medium-low. Varonis has a defensible niche, a working SaaS transition, and a strong balance sheet, but the stock prices in a successful profitability transition at a premium multiple. The outcome depends on sustained SaaS growth, gross margin stabilization, and the pace toward GAAP breakeven.
Quick verdict table
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Varonis sells a specialized data and AI security platform that discovers, classifies, monitors, and protects unstructured data and AI workloads, with recurring SaaS revenue, high switching costs after deployment, and increasing traction for newer products like Atlas, Interceptor, and Database Activity Monitoring. | Medium-high |
| Moat | The moat comes from deep integration with enterprise file systems, email, cloud platforms, and AI coding tools, Gartner Peer Insights Customers Choice recognition for DSPM, and GovRAMP authorization. Large competitors (Microsoft, CrowdStrike, Palo Alto Networks) limit pricing power. | Medium-high |
| Management | Co-founder CEO Yaki Faitelson has led the company since inception, and the Q2 2026 report showed disciplined execution: a revenue beat, positive non-GAAP operating income, and a raise to full-year guidance. Insider ownership near 3% is low, which is a monitor point. | Medium |
| Financial trend | Q2 2026 revenue grew 18.3% to $180.0M, SaaS ARR excluding conversions grew 25%, and non-GAAP EPS of $0.04 beat consensus. TTM revenue is $688.1M, but TTM GAAP net loss is $141.4M and Q2 billings fell 1.5% year over year. | Medium-high |
| Valuation | The stock trades near 6.7x TTM sales and about 37.6x TTM free cash flow, with a forward P/E reported between roughly 181x and 227x depending on the source and EPS basis. This is a premium for a company that is still GAAP loss-making. | Medium |
| Technical trend | Price sits above the 50-day ($38.91) and 200-day ($32.99) moving averages but has pulled back from the 52-week high of $63.90, with RSI near 41 showing weak short-term momentum after the post-earnings drop. | Medium-high |
| Risk level | Key risks are premium valuation, GAAP unprofitability driven by stock-based compensation and amortization, billings deceleration, gross margin compression, competition from larger vendors, and the lumpy enterprise sales cycle that showed up as slipped Q2 deals. | Medium-high |
| AI confidence | Medium-high confidence for financial statements, market math, and analyst consensus. Lower confidence for near-term price direction and for the timing of sustained GAAP profitability. | Medium-high |
| Investment certainty | Medium-low certainty. The SaaS transition and AI security demand are real, but the stock price already discounts a profitable future, and the market punished the latest beat because expectations were high. | Medium-low |
VRNS AI stock forecast
VRNS AI Stock Forecast Scenarios
The VRNS AI stock forecast uses scenario ranges around the $39.95 cutoff price. It does not claim that AI can predict a specific future price. The bullish case depends on sustained SaaS ARR growth near 25% excluding conversions, continued margin expansion toward GAAP breakeven, and AI data security demand. The base case assumes mid-teens revenue growth with persistent GAAP losses. The bearish case assumes growth deceleration, continued deal slippage, and multiple compression.
Base case
$35 to $48
More likely if revenue grows 15 to 18%, non-GAAP stays profitable while GAAP losses persist, and the stock holds a 5 to 6.5x forward sales multiple in line with cybersecurity peers.
Bearish case
$24 to $32
More likely if growth decelerates below 12%, large deals keep slipping, larger vendors bundle competing data security features, and the sales multiple compresses toward 3 to 4x.
VRNS AI technical analysis
VRNS AI Technical Analysis
VRNS AI technical analysis starts from the $39.95 close on July 31, 2026, used for this static page as of the August 3, 2026 data cutoff. Public technical sources show price above both the 50-day and 200-day moving averages after a post-earnings pullback, with weak momentum. Because this page does not fetch request-time market data, traders should confirm levels on a live chart before acting.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $39.95 | Close on July 31, 2026, the latest verified price used for this page. |
| Near support | $38.90 to $39.00 | The 50-day moving average near $38.91 and the July 31 intraday low near $38.96 form the first support zone. |
| Secondary support | $33.00 | The 200-day moving average near $32.99 is the next meaningful support after the 50-day area. |
| Key support | $28.00 to $30.00 | The analyst low target of $28 and the pre-recovery base area represent a major demand zone. |
| Near resistance | $40.93 to $42.00 | The July 31 intraday high near $40.93 and the immediate post-earnings reaction level near $41.12 cap the bounce. |
| Key resistance | $45.00 to $47.00 | The raised Citi target of $45 and the round level near $47 mark the next test for the recovery. |
| Analyst resistance band | $50.68 to $53.00 | The average price target of $50.68 and the median of $52.50 form the main overhead supply. |
| Upper resistance | $55.00 to $60.00 | Multiple raised targets from $55 (Cantor, B.Riley, JPMorgan, Susquehanna) to $60 (Jefferies) sit above the average. |
| 52-week high | $63.90 | The upper boundary of the 52-week range, last reached before the recent selloff. |
| 50-day moving average | $38.91 | Price is holding just above the 50-day average, which keeps the short-term trend intact. |
| 200-day moving average | $32.99 | Price is well above the 200-day average, confirming the longer-term uptrend from the $19.70 low. |
| Momentum | RSI near 41, weak | RSI near 41 shows momentum faded after the post-earnings drop, though price has not broken key support. |
| Volume | About 1.75 million shares on July 31 | Volume on the last close was below the 2.16 million 20-day average, suggesting the pullback lacks heavy participation. |
| Volatility | Beta 0.83, 52-week range $19.70 to $63.90 | Beta below 1.0 but the wide 52-week range shows high stock-specific volatility around earnings. |
| Invalidation | Close below $38.90, then $33.00 | A close below the 50-day area near $38.90 would weaken the short-term setup. A break of the 200-day area near $33.00 would signal a larger trend problem. |
VRNS AI trading strategy
VRNS AI Trading Strategy Framework
The VRNS AI trading strategy is a rules-based framework, not personalized advice. It combines filing-backed fundamentals, technical confirmation, position sizing, and clear invalidation levels.
Trend-following setup
Look for VRNS to reclaim and hold the $41 to $42 zone with volume, and confirm that SaaS ARR growth stays strong in the Q3 2026 report expected near October 27, 2026.
A daily close below the 50-day average near $38.90 should reduce confidence in the long setup.
Mean-reversion setup
If VRNS stabilizes near $38.90 or retests the $33.00 area without breaking it, compare the entry against the next earnings catalyst and the trend in non-GAAP versus GAAP profitability.
Do not assume the Q2 non-GAAP profit is a permanent step change. The TTM GAAP loss and falling billings argue for a conservative position size.
Fundamental monitor
Track Q3 2026 results (near October 27, 2026), SaaS ARR excluding conversions growth, billings, gross margin, free cash flow, and the closure of the slipped Q2 deals.
Lower confidence if growth decelerates below 15%, billings keep falling, gross margin keeps shrinking, or GAAP losses widen.
Investment research summary
Four-master Research Compression
Business essence
Varonis helps enterprises discover, classify, monitor, and protect unstructured data and AI workloads, and automate risk reduction. Customers pay for visibility and control over sensitive data, for threat detection, and for safe AI adoption.
Moat
The moat is built on deep integration with file systems, email, cloud platforms, and AI coding tools, high switching costs after deployment, Gartner Peer Insights Customers Choice for DSPM, and GovRAMP authorization for public sector deals.
Munger risk inversion
The thesis fails if larger cybersecurity vendors bundle data security into broader platforms, if growth decelerates and billings keep falling, if GAAP losses persist, or if the stock loses its premium multiple before the business becomes sustainably profitable.
Management
Co-founder CEO Yaki Faitelson led the company through the SaaS transition and the Q2 2026 beat with a raise to guidance. Non-GAAP profitability returned, but insider ownership near 3% is low and the slipped Q2 deals show the enterprise sales cycle is lumpy.
Industry trend
Cybersecurity spending keeps growing as breaches, privacy regulation, and AI adoption expand the attack surface. Data and AI security is a fast-growing sub-segment as enterprises adopt generative AI and need to govern the data feeding it.
Valuation and margin of safety
At about 6.7x TTM sales and a negative GAAP P/E, the stock prices in a successful profitability transition. The forward P/E of roughly 181x to 227x leaves little room for missteps, so the margin of safety is thin unless GAAP profitability arrives quickly.
Source-backed data
VRNS Data Table
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| VRNS share price | $39.95 close on July 31, 2026 | StockAnalysis and Yahoo Finance quote snapshots | August 3, 2026 |
| Market capitalization | $4.59 billion, verified as $39.95 x 114.86 million shares via financial_rigor.py (0.03% deviation) | financial_rigor.py market cap verification | August 3, 2026 |
| Shares outstanding | 114.86 million, up 3.13% year over year | StockAnalysis statistics | August 3, 2026 |
| TTM revenue | $688.10 million (cross-validated StockAnalysis $688.10M vs Yahoo $688.09M, 0.00% deviation) | financial_rigor.py cross-validation | August 3, 2026 |
| Q2 2026 revenue | $180.0 million, up 18.3% year over year, versus consensus of $176.9 million | Varonis Q2 2026 earnings release | July 28, 2026 |
| Q2 2026 non-GAAP EPS | $0.04 versus consensus of $0.01; non-GAAP net income of $5.3 million | Varonis Q2 2026 results and StockStory recap | July 28, 2026 |
| Q2 2026 GAAP net loss | $46.8 million, GAAP operating loss of $40.6 million | Varonis Q2 2026 earnings release | July 28, 2026 |
| TTM net income | -$141.38 million GAAP; diluted EPS of -$1.22 | StockAnalysis and Yahoo Finance | August 3, 2026 |
| SaaS ARR | $726.0 million total, up 52% year over year; $598.1 million excluding conversions, up 25% | Varonis Q2 2026 earnings release and earnings call | July 28, 2026 |
| Full-year 2026 guidance | Revenue $735M to $739M, SaaS ARR $819M to $850M, free cash flow $105M to $110M, non-GAAP EPS $0.14 to $0.15 | Varonis Q2 2026 earnings release | July 28, 2026 |
| Cash and marketable securities | $911.5 million as of June 30, 2026 | Varonis Q2 2026 balance sheet | July 28, 2026 |
| Free cash flow | $121.94 million TTM (StockAnalysis); $69.1 million in the first half of 2026 | StockAnalysis and Varonis Q2 2026 release | August 3, 2026 |
| Price-to-sales ratio (TTM) | 6.67x per StockAnalysis, 6.73x per Yahoo Finance | StockAnalysis and Yahoo Finance statistics | August 3, 2026 |
| Analyst consensus | Buy from 24 analysts; average target $50.68, range $28 to $60, median $52.50 | StockAnalysis forecast page | July 30, 2026 |
| Valuation verification | PB 10.32x, P/FCF 37.69x, FCF yield 2.65%, PS 6.67x via financial_rigor.py | financial_rigor.py valuation verification | August 3, 2026 |
Frequently Asked Questions
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This VRNS AI stock analysis is an informational tool for research and education only. It is not investment advice, a recommendation, or a guarantee of future performance. Forecast ranges are scenarios based on available data as of August 3, 2026 and can be wrong. Data sources differ on some metrics: forward P/E is reported near 181x by StockAnalysis and near 227x by Yahoo Finance on different EPS bases, and the market cap reflects the July 31, 2026 close of $39.95. Confirm all figures before making decisions.
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