Critical Survey: Varonis Systems (NASDAQ:VRNS) & SentinelOne (NYSE:S)

Varonis Systems (NASDAQ:VRNS) and SentinelOne (NYSE:S) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

95.7% of Varonis Systems shares are held by institutional investors. Comparatively, 90.9% of SentinelOne shares are held by institutional investors. 2.3% of Varonis Systems shares are held by company insiders. Comparatively, 4.3% of SentinelOne shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Varonis Systems has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, SentinelOne has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Earnings and Valuation

This table compares Varonis Systems and SentinelOne”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Varonis Systems	$550.95 million	11.58	-$95.76 million	($0.92)	-61.90
SentinelOne	$821.46 million	6.70	-$288.44 million	($1.32)	-12.54

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Varonis Systems	-17.30%	-23.06%	-5.76%
SentinelOne	-49.36%	-15.95%	-10.89%

Analyst Ratings

This is a breakdown of current recommendations for Varonis Systems and SentinelOne, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Varonis Systems	0	3	13	0	2.81
SentinelOne	0	10	17	3	2.77

Varonis Systems presently has a consensus target price of $58.50, indicating a potential upside of 2.72%. SentinelOne has a consensus target price of $24.80, indicating a potential upside of 49.80%. Given SentinelOne’s higher probable upside, analysts plainly believe SentinelOne is more favorable than Varonis Systems.

Summary

SentinelOne beats Varonis Systems on 8 of the 15 factors compared between the two stocks.

About Varonis Systems

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; source code, strategic and product plans; and other intellectual property. It 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. In addition, the company offers Data Transport Engine, 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 provides search functionality for enterprise data. It serves its products to financial services, public, healthcare, industrial, technology, insurance, energy and utilities, consumer and retail, education and construction, and engineering sectors. The company sells its products through a network of distributors and resellers. Varonis Systems, Inc. was incorporated in 2004 and is headquartered in New York, New York.

About SentinelOne

SentinelOne, Inc. operates as a cybersecurity provider in the United States and internationally. Its Singularity Platform delivers an artificial intelligence-powered autonomous threat prevention, detection, and response capabilities across an organization's endpoints, cloud workloads, and identify credentials, which enables seamless and autonomous protection against a spectrum of cyber threats. In addition, it offers endpoint protection, endpoint detection and response, cloud and identity security, attack surface management, mobile endpoint security, xdr power tools, watchtower, and vigilance MDR. The company was formerly known as Sentinel Labs, Inc. and changed its name to SentinelOne, Inc. in March 2021. SentinelOne, Inc. was incorporated in 2013 and is headquartered in Mountain View, California.