Reviewing Varonis Systems (NASDAQ:VRNS) and MicroStrategy (NASDAQ:MSTR)

Varonis Systems (NASDAQ:VRNSGet Rating) and MicroStrategy (NASDAQ:MSTRGet Rating) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares Varonis Systems and MicroStrategy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Varonis Systems -31.58% -19.97% -10.71%
MicroStrategy -109.68% -30.40% -5.65%

Valuation and Earnings

This table compares Varonis Systems and MicroStrategy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Varonis Systems $390.13 million 9.69 -$116.86 million ($1.21) -28.51
MicroStrategy $510.76 million 6.50 -$535.48 million ($54.33) -5.42

Varonis Systems has higher earnings, but lower revenue than MicroStrategy. Varonis Systems is trading at a lower price-to-earnings ratio than MicroStrategy, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

93.2% of Varonis Systems shares are owned by institutional investors. Comparatively, 52.9% of MicroStrategy shares are owned by institutional investors. 1.9% of Varonis Systems shares are owned by company insiders. Comparatively, 22.6% of MicroStrategy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Varonis Systems has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, MicroStrategy has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Varonis Systems and MicroStrategy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Varonis Systems 0 1 12 0 2.92
MicroStrategy 1 1 1 0 2.00

Varonis Systems presently has a consensus target price of $61.08, indicating a potential upside of 77.05%. MicroStrategy has a consensus target price of $585.75, indicating a potential upside of 99.07%. Given MicroStrategy’s higher probable upside, analysts plainly believe MicroStrategy is more favorable than Varonis Systems.

Summary

Varonis Systems beats MicroStrategy on 8 of the 13 factors compared between the two stocks.

Varonis Systems Company Profile (Get Rating)

Varonis Systems, Inc. provides software products and services that allow enterprises to manage, analyze, alert, and secure enterprise data in North America, Europe, the Middle East, Africa, and internationally. Its software enables enterprises to protect data stored on premises and in the cloud, including sensitive files and emails; confidential personal data belonging to customers, and patients and employees' data; financial records; strategic and product plans; and other intellectual property. The company offers DatAdvantage that captures, aggregates, normalizes, and analyzes every data access event for users on Windows and UNIX/Linux servers, storage devices, email systems, Intranet servers, cloud applications, and data stores; and DatAlert that profiles users, devices, and their behaviors related to systems and data, detects and alerts on deviations that indicate compromise, and provides a Web-based dashboard and investigative interface. It also provides Data Classification Engine that identifies and tags data based on criteria set in various metadata dimensions, as well as provides business and information technology (IT) personnel with actionable intelligence about data; and DataPrivilege, which offers a self-service Web portal that allows users to request access to data necessary for their business functions, and owners to grant access without IT intervention. In addition, the company provides Data Transport Engine, which provides an execution engine that unifies the manipulation of data and metadata, translating business decisions, and instructions into technical commands, such as data migration or archiving; and DatAnswers that offers search functionality for enterprise data. Varonis Systems, Inc. sells products and services through a network of distributors and resellers. The company serves IT, security, and business personnel. Varonis Systems, Inc. was incorporated in 2004 and is headquartered in New York, New York.

MicroStrategy Company Profile (Get Rating)

MicroStrategy Incorporated provides enterprise analytics software and services worldwide. It offers MicroStrategy, an enterprise platform, which provides a modern analytics experience by delivering insights across multiple devices to users via hyperintelligence products, visualization and reporting capabilities, mobility features, and custom applications developed on the platform; analysts and data scientists with seamless access to trusted, governed data directly within their tools; and APIs and gateways, multiple deployment options, enterprise semantic graph, scalability, and security. The company also provides MicroStrategy Support that helps customers to achieve their system availability and uptime goals, and to improve the overall experience through highly responsive troubleshooting and proactive technical product support. In addition, it offers MicroStrategy Consulting that provides customers with architecture and implementation services to help them quickly realize results, and helps to achieve returns on investment derived from understanding of data; and MicroStrategy Education that offers free and paid learning options. The company provides its services through enterprise sales force and channel partners. It serves companies from a range of industries, including retail, consulting, technology, manufacturing, finance, banking, insurance, healthcare, education, and telecommunications, as well as the public sector. The company was incorporated in 1989 and is headquartered in Tysons Corner, Virginia.

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