Varonis Systems Stock Takes a Beating on Subscription Buzz

At least 10 analysts have already issued bear notes

by Lillian Currens

Published on Feb 12, 2019 at 10:48 AM

Varonis Systems Inc (NASDAQ:VRNS) is already shaping up to be one of the worst stocks on the Nasdaq today -- down 17.5% at $52.79, at last check. The cybersecurity concern last night lowered its full-year and first-quarter guidance, and said it was shifting to a subscription-based model. Now, VRNS is pacing for its worst day since May 2015. 

At least 10 analysts have issued bear notes, including Stifel, which cut its rating to "hold" from "buy," and slashed its target price to $52 from $75; Morgan Stanley, which lowered its target price to $55 from $61; and JMP Securities, which downgraded the stock to "market perform" from "market outperform." Nevertheless, the consensus 12-month target price OF $64.15 is still a 19% premium to current levels. 

Prior to today's drubbing, the security was fresh off its third consecutive weekly win -- up 31.4% since hitting its annual low of $48.67 on Jan. 3, based on last night's close. However,  earlier today, VRNS stock came just within striking distance of its January bottom, tagging an intraday low of $49.50, before finding support above the round $50 level.  

Short sellers are likely cheering today's price action. Short interest surged 61.2% in the two most recent reporting periods to 780,000 shares -- the most since Oct. 1. These bearish bettors are sidelined today, though, with VRNS stock on the short-sale restricted list.

 

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