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Valued as a mature, profitable company: Discounted cash flow and P/E comparison.
ACCE opinionVaronis Systems Inc. Common Stock (VRNS)
Fair value (2 models)
Not available
ACCE price target
$50.00
Rating
Not rated
Horizon
12 months
ACCE price target published on 28 Sept 2026, 00:00 CEST.
Price used: $48.88 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow and P/E comparison.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
ACCE score
44
out of 100
Analysts
58% buy
24 covering
1-year return
-21.6%
Dividend yield
0.00%
Varonis Systems Inc. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Varonis sells data security and governance software that maps who can access sensitive files across on-premises and cloud systems, flags unusual behavior, and automates remediation, with its Data Security Platform being the core product. Its moat rests on years of metadata and classification depth that are hard for newer entrants to replicate, and that depth supports a 77.1% gross margin. The near-term growth case depends on continued shift from perpetual licenses to subscriptions and on demand for data-centric security as AI tools widen employee access to unstructured data. The stock screens expensive, with a forward P/E of 119.4 against 18.3% revenue growth, and operating margin of -22.6% means profitability has not yet caught up with the sales story. Our score of 44/100 is weak, so this name warrants a deeper look only if the margin trajectory and subscription retention data justify paying a premium for the growth.
⚠ Investor warnings · 4 flagsAI-assisted·How I use AI
high
Unprofitable with negative ROE
Net margin -20.5%, operating margin -22.6%, ROE -36.0%. Company burns cash operationally despite $139M FCF (likely from working capital, not earnings).
high
Earnings stalled despite revenue growth
Revenue +18.3% YoY but earnings flat (+0.0%). Margin compression suggests cost structure not scaling with sales.
moderate
Elevated leverage with negative earnings
Debt/Equity 1.19 while company is unprofitable. Refinance or covenant risk if growth slows or rates stay high.
moderate
ACCE score deteriorating
Score fell 3 points in 90 days (47 to 44). Valuation (V:18) and Quality (Q:38) both weak; Growth score also declining.
AI research notes
AI-assisted·How I use AIWritten Oct 11, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Revenue accelerated to 18.3% year-over-year growth, well above the 9.6% five-year average, showing strong market demand.
The company generated 139 million dollars in free cash flow over the last twelve months despite negative GAAP earnings.
Seventy-one percent of analysts rate the stock Buy or Strong Buy, with a mean price target 2.4% above current levels.
Why it could disappoint
The forward P/E of 122.8x is extreme even for a high-growth software company, leaving little room for execution missteps.
Share count jumped 15.7% in the last fiscal year, diluting existing shareholders while the company remains unprofitable.
Negative 20.5% net margin and negative 36.0% ROE mean Varonis still burns capital and cannot fund growth from operations.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Nov 3, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
INVESTOR
Where VRNS's valuation models land
Price
$48.88
Model fair valueConfidence: medium
$16.31
Model
Fair value
Upside
Discounted cash flow
P/E comparison
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
The full quality picture: a reason under every score, how the scores moved, and the conviction breakdown.
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+Conviction breakdown and growth / value / quality / momentum scores