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Investing.com - Needham raised its price target on Varonis Systems (NASDAQ:VRNS) to $70.00 from $60.00 on Wednesday, while maintaining a Buy rating following the company’s second-quarter 2025 results. The new target represents significant upside from the current $54.23 trading price, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
The data security firm delivered strong quarterly performance, with management expressing confidence in both the progression of its SaaS migration and the resilient demand environment, consistent with messaging from the previous quarter. The company maintains impressive gross profit margins of 82.29% and has achieved 13.34% revenue growth over the last twelve months.
Varonis has increased its calendar year 2025 ARR (Annual Recurring Revenue) guidance by the magnitude of the quarter’s outperformance and raised its expected SaaS mix projection to 82% from 80% by year-end.
Needham emphasized the growing importance of data security, particularly in an "Agentic AI world," noting that Varonis’s strategic partnership with Microsoft (NASDAQ:MSFT) and protection for ChatGPT Enterprise are elevating awareness of the company’s offerings.
Management reported accelerating new customer acquisition and larger initial deployments, which support the company’s anticipated return to over 20% ARR growth, although Needham indicated the market remains uncertain about existing customers’ ARR growth as upsells become more important and conversion benefits decrease. With a market capitalization of $6.07 billion, analysts maintain a bullish consensus on the stock, with price targets ranging from $47 to $65.
In other recent news, Varonis Systems reported its second-quarter 2025 earnings, surpassing market expectations. The company achieved earnings per share (EPS) of $0.03, outperforming the forecast of $0.01. Revenue also exceeded predictions, reaching $152.2 million compared to the anticipated $148 million. Additionally, Varonis Systems reported strong performance in annual recurring revenue (ARR) and free cash flow, further solidifying its financial standing. In response to these results, Cantor Fitzgerald raised its price target for Varonis Systems from $60.00 to $63.00, maintaining an Overweight rating. The firm’s positive outlook is attributed to the company’s successful transition to a SaaS model. These developments highlight Varonis Systems’ robust financial performance and positive reception from analysts.
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