Varonis Systems Inc (VRNS, Financial), a leading cybersecurity vendor, has seen a significant surge in its stock price over the past three months. As of October 31, 2023, the company's stock price has risen by 12.38%, despite a slight dip of 1.19% over the past week. Currently, the stock is trading at $32.52, with a market cap of $3.57 billion. According to the GF Value, defined by GuruFocus.com, which calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates, the stock is significantly undervalued, with a GF Value of $54.4. This is a slight decrease from the GF Value of $57.54 three months ago, but the valuation remains significantly undervalued.
Unpacking Varonis Systems Inc
Founded in 2004 and publicly listed in 2014, Varonis Systems Inc operates in the software industry, specializing in data privacy and security. The New York-based firm is currently transitioning its on-premises customers to its cloud products, which are delivered as software-as-a-service. This strategic move is expected to enhance the company's market position and drive future growth. 
Profitability Analysis of Varonis Systems Inc
Despite the recent surge in stock price, Varonis Systems Inc's profitability rank stands at 3 out of 10, as of June 30, 2023. The company's operating margin is -24.23%, which is better than 24.2% of companies in the industry. The ROE and ROA stand at -23.17% and -11.19% respectively, outperforming 23.78% and 28.33% of companies in the sector. However, the ROIC of -57.64% is only better than 12.58% of companies, indicating a need for improvement in cash flow generation relative to capital investment. 
Growth Prospects of Varonis Systems Inc
Varonis Systems Inc's growth rank is 6 out of 10, indicating a promising growth trajectory. The company's 3-year and 5-year revenue growth rate per share are 15.70% and 9.50% respectively, outperforming 66.71% and 60.38% of companies in the industry. The total revenue growth rate for the next 3 to 5 years is estimated at 10.94%, better than 48.21% of companies. However, the 3-year and 5-year EPS without NRI growth rates are -9.40% and -46.70% respectively, with the latter only better than 2.48% of companies. The future 3 to 5-year EPS growth rate is estimated at 49.81%, outperforming 94.21% of companies. 
Varonis Systems Inc's Stock Holders
The top three holders of Varonis Systems Inc's stock are Ron Baron (Trades, Portfolio), Jim Simons (Trades, Portfolio), and Baillie Gifford (Trades, Portfolio), holding 0.89%, 0.53%, and 0.02% of the shares respectively. Ron Baron (Trades, Portfolio) holds the most shares, with a total of 972,009 shares, followed by Jim Simons (Trades, Portfolio) with 586,300 shares, and Baillie Gifford (Trades, Portfolio) with 26,782 shares.
Competitive Landscape of Varonis Systems Inc
Varonis Systems Inc operates in a competitive industry, with Box Inc (BOX, Financial), Flywire Corp (FLYW, Financial), and Euronet Worldwide Inc (EEFT, Financial) being its top three competitors. These companies have market caps of $3.52 billion, $3.24 billion, and $3.78 billion respectively, closely matching Varonis Systems Inc's market cap of $3.57 billion.
Conclusion
In conclusion, Varonis Systems Inc has demonstrated a strong stock performance over the past three months, with a significant 12.38% increase in stock price. Despite some profitability challenges, the company's growth prospects look promising, backed by a solid growth rank and positive revenue growth rates. With a strong shareholder base and a competitive position in the industry, Varonis Systems Inc is well-positioned for future growth.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
