Yahoo Finance Why Is Varonis (VRNS) Stock Soaring Today
What Happened:
Shares of data protection and security software company Varonis (NASDAQ:VRNS) jumped 12.9% in the morning session after the company reported a "beat and raise" quarter. Second-quarter earnings result exceeded Wall Street's revenue and EPS expectations. In addition, it was great to see Varonis' optimistic revenue guidance and outlook for the next quarter, which exceeded analysts' expectations. Precisely, the third quarter is expected to benefit from solid contributions from the Fed vertical. Similarly, full-year revenue guidance was raised and came in ahead of consensus. Overall, this was a strong quarter that should satisfy shareholders.
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What is the market telling us:
Varonis's shares are quite volatile and over the last year have had 6 moves greater than 5%. But moves this big are very rare even for Varonis and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 6 months ago, when the stock gained 10% on the news that the company reported third-quarter results that exceeded analysts' revenue, billings, free cash flow, and EPS estimates. Despite macro challenges, the company continued to make progress on its transition to a subscription-based model with a SaaS mix at 66% of revenues (versus guidance of 60%).
On the other hand, despite the improvements, its full-year revenue guidance missed Wall Street's estimates. Overall, this was a mixed quarter for Varonis, though the progress made on transitioning to a SaaS model is promising.
Following the results, Wedbush analyst Daniel Ives upgraded the stock's rating from Neutral to Outperform and raised the price target from $35 to $65. The new price target represents a potential 30% upside from where shares traded when the upgrade was announced. He added, "On the heels of another strong quarter with further evidence the model transition is hitting its next gear of growth and also the AI Revolution will give VRNS a clear tailwind over the next 12 to 18 months in our view."
Varonis is up 19.9% since the beginning of the year, and at $53.30 per share, has set a new 52-week high. Investors who bought $1,000 worth of Varonis's shares 5 years ago would now be looking at an investment worth $2,246.
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