It's been a sad week for Varonis Systems, Inc. (NASDAQ:VRNS), who've watched their investment drop 11% to US$40.01 in the week since the company reported its annual result. Varonis Systems reported revenues of US$551m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.86 per share, which were slightly larger than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Varonis Systems after the latest results.

See our latest analysis for Varonis Systems

Taking into account the latest results, the most recent consensus for Varonis Systems from 21 analysts is for revenues of US$621.2m in 2025. If met, it would imply a solid 13% increase on its revenue over the past 12 months. Per-share losses are predicted to creep up to US$0.89. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$629.2m and losses of US$0.74 per share in 2025. While this year's revenue estimates held steady, there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target held steady at US$54.81, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Varonis Systems, with the most bullish analyst valuing it at US$67.00 and the most bearish at US$38.12 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Varonis Systems' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it's pretty clear that, while Varonis Systems' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Varonis Systems. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Varonis Systems going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Varonis Systems that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.