Varonis Systems (NASDAQ:VRNS) stock price has rallied massively in the last three months and the share price doubled since the start of the last year, amid its impressive financial numbers and innovative technologies. Varonis Systems offers software solutions, which helps in protecting data from cyber attacks and internal threats. Therefore, Varonis products are allowing organizations to secure, analyze, migrate, and manage unstructured data.
Market fundamentals are strong for Varonis Systems considering increasing regulatory scrutiny and recent high-profile data breaches. Several organizations are now using a more data-centric strategy in their security initiatives. In order to capitalize on increasing opportunities, Varonis continues to offer innovative products that access controls, analyzes data content, and cloud systems to reduce the risk and to notice unusual behaviors that specify a possible data breach.
Nevertheless, VRNS stock has further upside potential, due to the potential growth of 28% in fiscal 2017 revenue and a similar growth in FY 2018.
On the other hand, Varonis seeks to release Varonis Edge in the days to come. This product will analyze metadata from devices, including web security, DNS servers, and VPN gateways to identify malware, cyber attacks, and advanced persistent threats. Along with spotting the threat, Varonis Edge will allow companies to understand the complete picture of an attack – how malware reached their device and how they try to sneak out without being detected.
Its cash flow generating potential has also been expanding with the growth in revenue and earnings. In the latest quarter, it generated $3 million in operating cash flows, while the company plans to reinvest the entire cash back into their business. Although, Varonis stock appears expensive trading around 16 times to book value and 7 times to sales ratio, its fundamentals and financial numbers will support the price momentum. Overall, the short-term growth investors can sell the stock to capitalize on the recent gains, but the VRNS stock looks like a good stock to hold for the long-term investors.
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