Varonis Systems Faces Securities Class Action Lawsuit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 23h ago
0mins
Source: Globenewswire
- Lawsuit Notification Issued: Hagens Berman law firm has issued a notice to investors in Varonis Systems, Inc. (NASDAQ: VRNS), urging them to submit lead plaintiff applications by March 9, 2026, in a pending securities class action lawsuit against the company and its executives.
- Performance Decline Revealed: The lawsuit alleges that Varonis executives misled the market about their ability to transition legacy customers to a new SaaS platform, with an October 28, 2025 disclosure showing a staggering 63.9% year-over-year decline in subscription revenues, leading to a 48% stock crash and a $3.8 billion loss in market capitalization in just one day.
- False Promises of Growth Potential: The lawsuit claims that Varonis assured investors of an accelerated SaaS transition and significant annual recurring revenue growth, yet failed to effectively convince existing customers to migrate, resulting in a performance miss that contradicted prior optimistic statements.
- Significant Guidance Reduction: Following a disappointing Q3 performance, Varonis slashed its Q4 and full-year ARR guidance, highlighting systemic risks in its core growth strategy and exacerbating investor concerns about the company's future prospects.
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Analyst Views on VRNS
Wall Street analysts forecast VRNS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for VRNS is 52.18 USD with a low forecast of 37.00 USD and a high forecast of 80.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
14 Buy
4 Hold
0 Sell
Strong Buy
Current: 33.410
Low
37.00
Averages
52.18
High
80.00
Current: 33.410
Low
37.00
Averages
52.18
High
80.00
About VRNS
Varonis Systems, Inc. is a data security company. The Company’s cloud-native data security platform discovers and classifies critical data, removes exposures, and detects advanced threats with artificial intelligence (AI)-powered automation. Varonis software enables enterprises of all sizes and industries to protect data stored in the cloud and on-premises, including sensitive files, emails and databases; confidential personal data belonging to customers, patients and employees; financial records; source code, strategic and product plans; and other intellectual property. Its SaaS product portfolio includes two product lines: its flagship Varonis Data Security Platform, which protects Microsoft 365, Windows file shares, Active Directory, Edge devices (VPN, DNS, proxy), UNIX/Linux and hybrid NAS storage, and DatAdvantage Cloud, which protects IaaS environments and SaaS applications, such as Salesforce, AWS, Azure, Google Cloud, Google Workspace, Databricks, ServiceNow, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Varonis Faces Class Action Lawsuit Amid Significant Stock Decline
- Class Action Notification: Levi & Korsinsky LLP has informed investors in Varonis Systems, Inc. (NASDAQ: VRNS) of a class action lawsuit due to alleged securities fraud, aiming to recover losses for investors affected between February 4, 2025, and October 28, 2025.
- Significant Financial Decline: On October 28, 2025, Varonis reported third-quarter results that revealed a substantial miss in annual recurring revenue (ARR) and lowered its full-year 2025 guidance, indicating weak customer renewals and conversions.
- Dramatic Stock Volatility: Following the disappointing earnings report, Varonis' stock plummeted from $63.00 per share on October 28, 2025, to $32.34 per share on October 29, 2025, marking a staggering decline of approximately 48.67% in just one day, severely impacting investor confidence.
- Layoffs and Product Termination: The company announced the end of its self-hosted solution and a 5% workforce reduction, highlighting challenges in transitioning to a SaaS model, which further dampens market expectations for future growth.
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Class Action Filed Against Varonis for Investor Losses
- Class Action Initiated: Bragar Eagel & Squire has filed a class action lawsuit against Varonis in the Southern District of New York on behalf of investors who purchased shares between February 4, 2025, and October 28, 2025, with a deadline of March 9, 2026, for lead plaintiff applications.
- Allegations of Misrepresentation: The lawsuit alleges that Varonis made materially false and misleading statements during the class period, failing to disclose significant adverse facts about its business and operations, which misled investors regarding the company's prospects.
- Declining Financial Performance: Varonis reported third-quarter 2025 results that missed consensus estimates, with a 63.9% year-over-year decline in annual subscription revenues, and subsequently lowered its full-year ARR guidance, indicating severe operational challenges.
- Stock Price Plummet: Following the earnings report, Varonis's stock price fell by $30.66, or 48.7%, closing at $32.34 per share, significantly harming investors and reflecting a lack of confidence in the company's future growth.
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