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Varonis Systems (NASDAQ:VRNS) Share rose about 1.5% in pre-market trading on Friday when JP Morgan updated the data security company, explaining that its push toward software as a service makes “strategic sense.”
Analysts at the investment firm raised the rating of Varonis Systems (VRNS) stock to neutral and said they have been “encouraged” by the traction Varonis has seen in the first few quarters of the transition.
They added that Varonis (VRNS) is likely to face a simpler setup in the second half of the year and view the company’s recently “unsolicited” adoption as a “positive catalyst,” assuming it continues. Converting to software as a service can generate 25% to 30% revenue growth compared to existing subscriptions and the migration is likely to be completed in the next four to six years.
Additionally, analysts said any deals that have been postponed since the first half of the year are likely to close in the second half, which would give the stock an “easier setup.”
Analysts are largely bullish on Varonis (VRNS). Have a BUY rating from the authors of Seeking Alpha, while Wall Street analysts rate it as BUY. In contrast, Searching Alpha’s quantitative system, which consistently outperforms the market, rates VRNS as HOLD.
