Varonis Systems Stock Fell 49% in a Day, What Now?
Varonis Systems (VRNS) stock is down 48.7% in a day. History of recovery post-dips is not on your side and there is fundamental risk – specific to profitability and downturn resilience. Consider the following data:
- Size: Varonis Systems is a $3.6 Bil company with $573 Mil in revenue currently trading at $32.34.
- Fundamentals: Last 12 month revenue growth of 13.3% and operating margin of -19.8%.
- Liquidity: Has Debt to Equity ratio of 0.2 and Cash to Assets ratio of 0.39
- Valuation: Varonis Systems stock is currently trading at P/E multiple of -40.0 and P/EBIT multiple of -48.9
- Has returned (median) 2.7% within a year following sharp dips since 2010. See VRNS Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for VRNS, see Buy or Sell VRNS Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and VRNS drops another 20-30% to $23 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
A single stock can be risky, but there is a huge value to a broader, diversified approach we take with the Trefis High Quality Portfolio. Separately, consider what the long-term performance for your portfolio could be if you combined 10% commodities, 10% gold, and 2% crypto with equities.
Below are the details, but before that, as a quick background: VRNS provides software solutions for managing, analyzing, securing, and classifying enterprise data across on-premises and cloud environments, protecting sensitive and confidential information.
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2022 Inflation Shock
- VRNS stock fell 78.2% from a high of $73.41 on 7 September 2021 to $16.01 on 4 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $63.31 on 8 October 2025 , and currently trades at $32.34
| VRNS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -78.2% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- VRNS stock fell 44.7% from a high of $30.88 on 14 February 2020 to $17.06 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 1 July 2020
| VRNS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -44.7% | -33.9% |
| Time to Full Recovery | 105 days | 148 days |
2018 Correction
- VRNS stock fell 40.2% from a high of $27.30 on 12 June 2018 to $16.34 on 3 January 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 13 January 2020
| VRNS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -40.2% | -19.8% |
| Time to Full Recovery | 375 days | 120 days |
It is a good thing to keep in mind how low VRNS could go during a downturn. And you should also check how the stock fared when compared with the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.