Varonis Systems (NASDAQ:VRNS) Shares Gap Down After Analyst Downgrade

Varonis Systems, Inc. (NASDAQ:VRNS)’s stock price gapped down prior to trading on Wednesday after DA Davidson lowered their price target on the stock from $40.00 to $25.00. The stock had previously closed at $26.53, but opened at $23.17. DA Davidson currently has a neutral rating on the stock. Varonis Systems shares last traded at $21.5470, with a volume of 1,820,645 shares trading hands.

Several other analysts also recently weighed in on VRNS. TD Cowen increased their target price on Varonis Systems from $62.00 to $68.00 and gave the company a “buy” rating in a research note on Friday, October 17th. Wedbush cut their price target on Varonis Systems from $53.00 to $35.00 and set an “outperform” rating for the company in a report on Wednesday. Barclays lowered their price objective on shares of Varonis Systems from $50.00 to $45.00 and set an “overweight” rating on the stock in a research note on Monday, January 5th. Stephens started coverage on shares of Varonis Systems in a research report on Tuesday, December 30th. They set an “equal weight” rating and a $40.00 target price on the stock. Finally, UBS Group set a $50.00 target price on shares of Varonis Systems in a research note on Monday, January 26th. Fifteen equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, Varonis Systems has an average rating of “Moderate Buy” and a consensus target price of $45.00.

Key Stories Impacting Varonis Systems

Here are the key news stories impacting Varonis Systems this week:

• Positive Sentiment: Q4 results beat — Varonis reported Q4 revenue of $173.4M and GAAP EPS $0.08 vs. consensus ~$0.03; SaaS ARR momentum and ARR growth were highlighted in the release, supporting longer-term subscription expansion. Q4 Results
• Positive Sentiment: Forward guidance surprised to the upside — FY‑2026 EPS guide was raised to $0.06–$0.10 (street had expected negative EPS) and revenue guidance of $722M–$730M implies continued growth tailwinds from SaaS and cloud adoption. (See company release above and earnings coverage.)
• Positive Sentiment: Strategic M&A — Varonis agreed to acquire AllTrue.ai (AI TRiSM) in a deal reported at ~$150M, bolstering its AI/security product set and positioning it to monetize AI-related security demand. Acquisition Coverage
• Neutral Sentiment: Analyst reactions mixed — multiple firms cut price targets (examples: B. Riley, JPMorgan, Cantor, Citi, Wedbush, Needham) but several kept buy/overweight stances; the revisions reflect shorter-term margin and transition risk rather than uniform downgrades. Analyst Notes
• Negative Sentiment: Heightened legal risk — multiple plaintiff firms (Kessler Topaz, Rosen, Levi & Korsinsky, Hagens Berman, Pomerantz, others) have filed or issued alerts for a securities‑class action alleging misleading statements about the SaaS transition; the lead-plaintiff deadline is March 9, 2026, increasing headline risk and potential settlement overhang. Kessler Topaz Alert
• Negative Sentiment: Bearish derivatives flow and selling pressure — unusually large put buying (4,051 puts, +206% vs. average) and heavy equity volume indicate traders are hedging or betting on further downside after the print.

Hedge Funds Weigh In On Varonis Systems

A number of hedge funds and other institutional investors have recently made changes to their positions in VRNS. Pacer Advisors Inc. increased its stake in Varonis Systems by 86.9% in the fourth quarter. Pacer Advisors Inc. now owns 11,637 shares of the technology company’s stock valued at $382,000 after acquiring an additional 5,411 shares during the period. Jennison Associates LLC lifted its stake in Varonis Systems by 92.6% during the fourth quarter. Jennison Associates LLC now owns 1,036,934 shares of the technology company’s stock worth $34,011,000 after purchasing an additional 498,413 shares during the period. State of New Jersey Common Pension Fund D boosted its holdings in Varonis Systems by 70.0% during the fourth quarter. State of New Jersey Common Pension Fund D now owns 65,478 shares of the technology company’s stock valued at $2,148,000 after purchasing an additional 26,969 shares in the last quarter. Keybank National Association OH grew its stake in shares of Varonis Systems by 18.7% in the 4th quarter. Keybank National Association OH now owns 10,400 shares of the technology company’s stock valued at $341,000 after purchasing an additional 1,641 shares during the period. Finally, Pictet Asset Management Holding SA raised its holdings in shares of Varonis Systems by 99.1% in the 4th quarter. Pictet Asset Management Holding SA now owns 2,178,380 shares of the technology company’s stock worth $71,480,000 after buying an additional 1,084,267 shares in the last quarter. 95.65% of the stock is owned by institutional investors.

Varonis Systems Stock Performance

The company has a current ratio of 1.81, a quick ratio of 1.81 and a debt-to-equity ratio of 0.75. The firm has a market capitalization of $2.79 billion, a price-to-earnings ratio of -20.76 and a beta of 0.58. The stock has a fifty day moving average price of $32.82 and a 200-day moving average price of $45.61.

Varonis Systems (NASDAQ:VRNS) last announced its quarterly earnings results on Tuesday, February 3rd. The technology company reported $0.08 earnings per share for the quarter, beating analysts’ consensus estimates of $0.03 by $0.05. Varonis Systems had a negative return on equity of 25.05% and a negative net margin of 20.74%.The firm had revenue of $173.37 million for the quarter, compared to analysts’ expectations of $168.66 million. During the same period in the prior year, the business posted $0.18 earnings per share. The business’s revenue was up 9.4% compared to the same quarter last year. Varonis Systems has set its FY 2026 guidance at 0.060-0.100 EPS and its Q1 2026 guidance at -0.060–0.050 EPS. As a group, analysts anticipate that Varonis Systems, Inc. will post -0.83 earnings per share for the current fiscal year.

About Varonis Systems

Varonis Systems is a cybersecurity firm specializing in the protection and management of unstructured data. The company’s flagship Data Security Platform provides advanced analytics for monitoring file systems, email servers, collaboration platforms and cloud storage. By continuously mapping and analyzing data permissions and user behavior, Varonis enables organizations to detect insider threats, verify compliance and remediate exposed data in real time.

Founded in 2005 and headquartered in New York City, Varonis serves a diverse global customer base across financial services, healthcare, media, manufacturing and government.