What happened
Shares of Varonis Systems (VRNS 1.59%), a data security and analytics company, were sliding today after Morgan Stanley analyst Hamza Fodderwala downgraded the company's stock and lowered his price target for its shares.
The tech stock is down 7.3% as of 12:22 p.m. ET.
So what
Fodderwala downgraded Varonis' stock to an equal weight rating from his previous overweight rating and lowered the stock's price target to $35 from $50.
Image source: Getty Images.
The analyst mentioned the company's slowing top-line sales growth as a reason for the downgrade and added that Varonis' signals have been "mixed" during conversations about sales cycles and net new customers, according to TheFly.com.
Now what
Investors were already growing increasingly pessimistic about Varonis. After the company reported its first-quarter results at the beginning of May, the tech stock plummeted, and it is now down 34% year to date.
Investors may have reacted strongly to today's downgrade as they take a more skeptical view of technology stocks in general right now. With inflation at a 40-year high and the Federal Reserve hiking the federal funds rate in order to tamp it down, investors are looking for safer places to put their money.
That's resulted in technology stocks falling lately and has put investors on alert to look for any reason to dump their shares. And with Varonis Systems' stock getting downgraded and its share price target cut today, investors are taking the news as a reason to sell their shares.
