NEW YORK - Varonis Systems , Inc. (NASDAQ:VRNS), a company specializing in data security, has achieved the "In Process" designation from the Federal Risk and Authorization Management Program (FedRAMP), marking a significant step towards full authorization. This status recognizes Varonis' alignment with federal goals of delivering secure and compliant cloud services.
The company's cloud-native Data Security Platform is designed to continuously identify and classify sensitive data, mitigate risks, and utilize AI-driven automation to counter advanced cybersecurity threats.
Varonis' technology supports government agencies and federal system integrators in securing critical data and complying with the Executive Order 14028, which mandates Zero Trust architecture, and the Office of Management and Budget (OMB) directives 22-09 and 21-31, which outline requirements for data and cybersecurity.
Varonis' solutions have been integral for U.S. civilian and Department of Defense (DOD) agencies in enforcing Zero Trust principles and responding to threats with automated systems. The FedRAMP "In Process" designation is a pivotal milestone for Varonis as it seeks to expand the reach of its cloud-native Data Security Platform within federal agencies.
Michael J. Wallace, President of U.S. Public Sector at Varonis, commented on the achievement, stating that the company takes pride in partnering with federal agencies and that the designation reinforces their commitment to being a preferred vendor for securing federal data.
Furthermore, Varonis is included in several government contract vehicles, such as GSA Schedule 70 and the U.S. Air Force Netcents-2 NetOps, and is now listed in the FedRAMP Marketplace.
The "In Process" designation is based on a press release statement and indicates that Varonis is actively working towards meeting the stringent requirements for full FedRAMP authorization, which would further endorse its cloud solutions for use in the federal government.
In other recent news, Varonis Systems has been the subject of several analyst reviews. JPMorgan upgraded Varonis stock to 'Overweight' and increased the price target to $54.00, citing the growing demand for Data Security and the potential of its recently introduced Managed Detection and Response (MDDR) services.
TD Cowen maintained its Buy rating on Varonis, highlighting the company's strong position in the data security sector. Baird increased its price target on Varonis to $50, acknowledging the company's progress in transitioning to a SaaS model. RBC Capital also raised its price target to $58 following Varonis' impressive recent quarter performance.
These are recent developments for Varonis Systems, which reported a significant 17% increase in annual recurring revenue (ARR) to $560.3 million in the first quarter. This growth is largely attributed to the company's successful transition to a software-as-a-service (SaaS) model and the positive market response to its MDDR service. The company's partnership with Microsoft (NASDAQ:MSFT) and the integration of generative AI into its services are among the strategic moves expected to contribute to future growth.
Varonis remains confident in its ability to seize a considerable market opportunity, as evidenced by its optimistic outlook for the remainder of 2024. The company anticipates continued growth with total revenues for Q2 2024 estimated between $123 million to $126 million. For the full year 2024, Varonis projects ARR to reach $622 million to $628 million.
InvestingPro Insights
As Varonis Systems, Inc. (NASDAQ:VRNS) progresses towards full FedRAMP authorization, its financial health and market performance provide additional context for investors monitoring the company's trajectory. Varonis holds a market capitalization of $4.83 billion, showcasing its substantial presence in the data security market.
A standout feature of the company's financials is its impressive gross profit margin, reported at 85.08% for the last twelve months as of Q1 2024. This figure underscores the company's ability to maintain high profitability on its services, which is particularly significant as it expands its footprint in the secure cloud services sector.
Investors may also note that Varonis has been trading at a high Price/Book multiple of 10.71, indicating the market's optimistic valuation of the company relative to its book value. While the company's Price/Earnings (P/E) ratio stands at -46.14, reflecting its current lack of profitability, analysts predict that Varonis will become profitable this year.
This anticipated turnaround could be a driving factor for future growth and investor confidence, especially as the company enhances its offerings within the federal government sector.
With these financial metrics in mind, interested parties can explore additional InvestingPro Tips for a deeper analysis of Varonis Systems. There are 12 more tips available on InvestingPro, including insights into the company's cash position, earnings revisions, and stock volatility. For those looking to leverage these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This offer could be particularly valuable for investors seeking to make informed decisions as Varonis continues to navigate the federal cybersecurity landscape.
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