Varonis Systems Inc. Common Stock (VRNS)

FairStock Score: 30/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

At the close on 2026-10-13, Varonis traded at $48.72, giving a $5.6B market value. FairStock’s calculations show a negative P/E of -39.93, a P/B of 12.59, ROE of -35.97%, ROCE of -5.72%, and debt-to-equity of 1.19. This is not a Graham bargain: the company has not earned a profit in the last four years, and the Lynch category is none because of those losses. The growth is real—revenue rose from $152.2M in fiscal Q2 2025 to $180.0M in fiscal Q2 2026, and FY2025 revenue was $623.5M versus $551.0M in FY2024 and $499.2M in FY2023. But profits have not followed. In fiscal Q2 2026, net income was -$46.8M and diluted EPS -$0.41, worse than fiscal Q2 2025’s -$35.8M loss. FY2025 net loss was -$129.3M, wider than FY2024’s -$95.8M. Management has produced positive trailing free cash flow of $118.3M, a 2.1% FCF yield, which is a genuine positive, yet it is modest against the market cap. Piotroski 4/9 and Altman 2.28 suggest financial strength is mixed. The business sells a SaaS data security platform, which can create switching costs if embedded, but I see no margin of safety in paying 12.59 times book for a loss-making enterprise. I would want evidence that revenue growth converts into durable owner earnings before calling this a high-quality compounder.

In plain English: Varonis makes software that helps organizations find, classify, and protect sensitive data. The company is growing sales but still losing money, and it has not earned a yearly profit in the last four years. At the recent price of $48.72, the stock looks expensive compared with those losses and with its accounting value.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer