Needham & Company Downgrades Varonis Systems (VRNS) to Hold

Needham & Company downgraded Varonis Systems (NASDAQ: VRNS) from Buy to Hold.

Analyst Scott Zeller commented, "The Varonis MarQ results were roughly in-line on revenue, yet had a larger than expected loss. The big news, however, was the weak guidance for JuneQ and the lowering of CY15 guidance – after a disappointing guide on the last earnings call. While Varonis is still a growth company, growing +32% y/y in MarQ, the company is clearly decelerating; investors will likely be concerned about the deceleration, given the aggressive S&M spending and the fact VRNS plays in both security and big data – two of the strongest areas of IT spending. Challenges in EMEA (UK, FRA, and RUS) are a clear headwind, and management expects a “fix” is a few quarters away. Shares were down materially in aftermarket, -15% near $22.50, or 3.3x EV/CY16 revenue. Lowering estimates materially, downgrade to HOLD."

For an analyst ratings summary and ratings history on Varonis Systems click here. For more ratings news on Varonis Systems click here.

Shares of Varonis Systems closed at $26.68 yesterday.

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