Shares of Varonis ( VRNS 1.85% ) jumped 35.6% in December, according to data provided by S&P Global Market Intelligence. Cybersecurity stocks broadly rallied last month following news of a massive hack that impacted many corporations and U.S. government agencies.
The widescale breach was reportedly orchestrated by the Russian government and the malicious actors were able to compromise SolarWinds' Orion platform. SolarWinds provides network management software that is used by many companies and governments. As the investigation continues, recent reports suggest that the intrusion is far worse than initially believed.
Many analysts believe that the episode will spur greater demand for cybersecurity technology, including Varonis' offerings. In the wake of the revelations, Truist Securities upgraded its rating on Varonis to buy, with analyst Joel Fishbein boosting his price target from $145 to $160. The company specializes in data security for both on-premises and cloud-based applications and has a strong position in governance and compliance, according to Fishbein.
The analyst believes that Varonis is positioned well and has the potential to beat fourth-quarter earnings estimates. The company's guidance calls for revenue of $82 million to $85 million and adjusted earnings per share of $0.10 to $0.13. Varonis shares approached $180 but have since pulled back and are currently trading right around Truist's price target, suggesting limited upside based on Fishbein's modeling.
Varonis has not yet scheduled its fourth-quarter earnings release but typically reports in early February.