Strength Seen in Varonis (VRNS): Can Its 8.1% Jump Turn into More Strength?

·2 min read

Varonis Systems VRNS shares rallied 8.1% in the last trading session to close at $25.50. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 14.8% loss over the past four weeks.

The upswing came after Varonis reaffirmed its guidance for first-quarter and full-year 2023. The company continues to expect first-quarter revenues between $106 million and $108 million while reporting non-GAAP loss in the range of 4-5 cents per share. For 2023, it still projects revenues and non-GAAP earnings to be in the ranges of $519-$529 million and 33-35 cents per share, respectively.

This data-management software company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +44.4%. Revenues are expected to be $107.26 million, up 11.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Varonis, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on VRNS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Varonis is part of the Zacks Security industry. Qualys QLYS, another stock in the same industry, closed the last trading session 2% higher at $120.29. QLYS has returned -2.4% in the past month.

For Qualys , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.96. This represents a change of +7.9% from what the company reported a year ago. Qualys currently has a Zacks Rank of #3 (Hold).

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