Here’s Why Varonis Systems Inc. (VRNS) Crashed on Wednesday

We recently compiled a list of the 10 Firms Defy Wednesday’s Broader Market Optimism. In this article, we are going to take a look at where Varonis Systems Inc. (NASDAQ:VRNS) stands against the other stocks.

Wall Street extended its winning streak on Wednesday, with all of its main indices closing in the green territory, as investors seemed to have already factored in the news of tariffs imposition alongside uncertainties surrounding the Artificial Intelligence industry.

The Dow Jones gained another 0.71 percent, the S&P 500 grew 0.39 percent, and the tech-heavy Nasdaq increased by 0.19 percent.

Ten companies, however, defied a broader market optimism, mostly due to disappointing earnings results. This article details the reasons behind the drop in their share prices and latest earnings performance.

To come up with Wednesday’s biggest losers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A close up of a software engineer typing on a laptop keyboard, focusing on the code development part of the company.

Varonis Systems Inc. (NASDAQ:VRNS)

Shares of Varonis Systems Inc. dropped by 7.41 percent on Wednesday to finish at $43.37 apiece after a number of investment research firms downgraded their outlooks for the company.

Following the release of Varonis’ 2024 performance, UBS lowered its price target for the company to $60 from $70 previously, albeit maintaining a “buy” rating.

Meanwhile, Wells Fargo trimmed its stock price target for Varonis to $46 from $48 previously while retaining an “equal weight” outlook.

During the fourth quarter of the year, Varonis said net loss widened by 1,346 percent to $12.99 million from only $898,000 registered in the same period last year, despite revenues inching up by nearly 3 percent to $158 million from the $154 million registered in the same period a year earlier.

Meanwhile, net loss in full-year 2024 narrowed by 5 percent to $95.76 million from $100.9 million year-on-year, while revenues jumped by 10.37 percent to $550.95 million from $499.16 million in 2023.

Overall VRNS ranks 10th on our list of Wednesday’s top losers. While we acknowledge the potential of VRNS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VRNS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.