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Why Varonis Systems Stock Fell 12.5% in September

By Keith Noonan - Oct 6, 2019 at 3:24PM

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The cybersecurity stock suffered a double-digit slide last month, but shares are still up roughly 15% year to date.

What happened

Shares of Varonis Systems ( VRNS -5.93% ) dipped 12.5% in September, according to data from S&P Global Market Intelligence. It's not clear exactly what prompted the sell-off, but the stock's biggest decline in the month corresponded with the company's presentation at this year's Gartner Security & Risk Management Summit.

VRNS Chart

VRNS data by YCharts

The Gartner conference ran from Sept. 9 through Sept. 11, and Varonis' stock dipped roughly 7.7% from the opening of the event through the day after its close. Meanwhile, the S&P 500 index gained roughly 1% across that same stretch, and the First Trust NASDAQ Cybersecurity ETF fell less than 0.7%. 

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Image source: Getty Images.

So what

Why Varonis stock experienced a sell-off last month is unclear, but the cybersecurity company's presentation at the Gartner event looks like a potential factor -- particularly because because the stock saw pronounced declines during and after the summit while the broader market gained ground. Investors may have been underwhelmed by what the company presented at the security summit, or they may have been more impressed by the features and plans laid out by a competitor. 

Varonis stock also received some unfavorable ratings coverage last month, with Bidaskclub publishing a note on the company on Sept. 14 and lowering its rating on the stock from a "hold" to a "sell." However, this appears to have had relatively little impact on the stock's September performance -- as shares actually ticked up in the next days of trading following the report.

Now what

Varonis stock has gained roughly 2% in October's trading so far -- movement that is roughly in line with gains made by the broader cybersecurity space. The company is expected to report third-quarter earnings early in November. It is guiding for sales to come in between $61 million and $62.5 million, representing a roughly 8% year-over-year decline at the midpoint of the target. Management is targeting a non-GAAP (adjusted) loss per share between $0.34 and $0.36 for the quarter, down from adjusted earnings of $0.05 per share in the third quarter of 2018.

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Varonis Systems, Inc. Stock Quote
Varonis Systems, Inc.
$48.10 (-5.93%) $-3.03

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