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Investing.com - Cantor Fitzgerald has reiterated an Overweight rating and $63.00 price target on Varonis Systems (NASDAQ:VRNS) following the company’s second-quarter 2025 results. According to InvestingPro data, the stock is trading near its 52-week high of $60.58, with 18 analysts recently revising their earnings estimates upward.
Varonis exceeded consensus expectations on revenue, annual recurring revenue (ARR), and free cash flow in the quarter, while accelerating its Software-as-a-Service (SaaS) transition. SaaS now represents 69% of ARR, with the company targeting 82% by year-end. The company maintains impressive gross profit margins of 81.5% and has achieved a 14.3% year-over-year revenue growth.
The cybersecurity firm reported ARR growth of 18.7% year-over-year, driven by new customer momentum, higher SaaS net retention rates, and cross-sell opportunities. Management expressed confidence in returning to 20%+ ARR growth after completing its transition to SaaS.
Free cash flow increased 59% year-over-year to $17.3 million, with cash flow conversion expected to remain a positive factor for the company going forward.
Cantor Fitzgerald identified several potential growth catalysts for Varonis, including upside from Multi-Dimensional Data Relationships (MDDR) and AI-driven demand, improving margins, and potential long-term federal growth following the company’s FedRAMP Moderate authorization.
In other recent news, Varonis Systems reported its second-quarter 2025 earnings, exceeding market expectations with earnings per share (EPS) of $0.03, surpassing the forecasted $0.01. Revenue also outperformed predictions, reaching $152.2 million compared to the anticipated $148 million. The company’s strong quarterly results were accompanied by a 19% growth in annual recurring revenue (ARR), with Software-as-a-Service (SaaS) offerings now comprising 69% of ARR. Analysts have responded positively to these developments, with RBC Capital raising its price target to $64 while maintaining an Outperform rating. Needham also increased its price target to $70, citing confidence in the company’s SaaS migration and a resilient demand environment. Cantor Fitzgerald followed suit, raising its price target to $63 and highlighting Varonis’ performance exceeding FactSet consensus estimates across key financial metrics. These recent developments reflect strong investor confidence and positive analyst sentiment toward Varonis Systems.
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