A combination of FX headwinds, weaker than expected closure rates in the Federal market, more challenging deal mechanics, and the expectation that these pressures evidenced in EMEA and ROW will be coming to the U.S. in CY23.
Varonis offered a steep decline in its growth outlook to 10%-12% in CY4Q and CY23, below Street expectations of 20%+ growth.
The seriousness of these pressures leads Varonis to execute a 5% staff cut to offset the pressures.
He thinks VRNS will likely remain under pressure through year-end. He also thinks the shares have been de-risked for CY23. He cut his estimates.
Piper Sandler analyst Rob Owens downgraded from Overweight to Neutral and lowered the price target from $37 to $20.
Wells Fargo analyst Andrew Nowinski downgraded from Overweight to Underweight and lowered the price target from $35 to $24.
Jefferies analyst Joseph Gallo maintained a Buy and lowered the price target from $35 to $30.
Barclays analyst Saket Kalia maintained an Equal-Weight and lowered the price target from $32 to $22.
Wedbush analyst Daniel Ives downgraded VRNS from Outperform to Neutral and lowered the price target from $40 to $20.
JMP Securities analyst Erik Suppiger maintained a Market Outperform and lowered the price target from $73 to $63.
Morgan Stanley analyst Hamza Fodderwala maintained an Equal-Weight and lowered the price target from $32 to $22.
RBC Capital analyst Matthew Hedberg maintained an Outperform and lowered the price target from $35 to $29.
Cowen & Co analyst Shaul Eyal maintained an Outperform and lowered the price target from $53 to $35.
Truist Securities analyst Joel Fishbein maintained a Buy and lowered the price target from $50 to $40.
Craig-Hallum analyst Chad Bennett downgraded from Buy to Hold and lowered the price target from $35 to $22.
Price Action: VRNS shares traded lower by 34.81% at $17.45 on the last check Tuesday.
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