Varonis Systems, Inc.
Varonis Systems, Inc. Fundamental Analysis
Varonis Systems, Inc. (VRNS) shows moderate financial fundamentals with a PE ratio of -21.17, profit margin of -20.74%, and ROE of -27.04%. The company generates $0.6B in annual revenue with strong year-over-year growth of 10.38%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -10.4/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze VRNS's fundamental strength across five key dimensions:
Efficiency Score
WeakVRNS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentVRNS trades at attractive valuation levels.
Growth Score
ModerateVRNS shows steady but slowing expansion.
Financial Health Score
ExcellentVRNS maintains a strong and stable balance sheet.
Profitability Score
WeakVRNS struggles to sustain strong margins.
Key Financial Metrics
Is VRNS Expensive or Cheap?
P/E Ratio
VRNS trades at -21.17 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, VRNS's PEG of 1.96 indicates fair valuation.
Price to Book
The market values Varonis Systems, Inc. at 4.57 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at -20.48 times EBITDA. This is generally considered low.
How Well Does VRNS Make Money?
Net Profit Margin
For every $100 in sales, Varonis Systems, Inc. keeps $-20.74 as profit after all expenses.
Operating Margin
Core operations generate -23.16 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-27.04 in profit for every $100 of shareholder equity.
ROA
Varonis Systems, Inc. generates $-7.22 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Varonis Systems, Inc. produces operating cash flow of $134.57M, showing steady but balanced cash generation.
Free Cash Flow
Varonis Systems, Inc. generates strong free cash flow of $123.04M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.04 in free cash annually.
FCF Yield
VRNS converts 5.45% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-21.17
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.96
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.57
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.008
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.96
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.97
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.27
vs 25 benchmark
ROA
Return on assets percentage
-0.07
vs 25 benchmark
ROCE
Return on capital employed
-0.13
vs 25 benchmark
How VRNS Stacks Against Its Sector Peers
| Metric | VRNS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -21.17 | 34.79 | Better (Cheaper) |
| ROE | -27.04% | 1185.00% | Weak |
| Net Margin | -20.74% | -131296.00% (disorted) | Weak |
| Debt/Equity | 0.96 | 0.43 | Weak (High Leverage) |
| Current Ratio | 1.97 | 4.90 | Neutral |
| ROA | -7.22% | -325472.00% (disorted) | Weak |
VRNS outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Varonis Systems, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
76.20%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
1.16%
Industry Style: Growth, Innovation, High Beta
GrowingFCF CAGR
976.62%
Industry Style: Growth, Innovation, High Beta
High Growth