Analyzing Varonis Systems (NASDAQ:VRNS) and Trend Micro (OTCMKTS:TMICY)
by Mitch Edgeman · The Markets DailyTrend Micro (OTCMKTS:TMICY – Get Free Report) and Varonis Systems (NASDAQ:VRNS – Get Free Report) are both mid-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.
Valuation & Earnings
This table compares Trend Micro and Varonis Systems”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Trend Micro | $1.85 billion | 3.05 | $231.30 million | $1.76 | 24.46 |
| Varonis Systems | $623.53 million | 8.87 | -$129.32 million | ($1.23) | -39.15 |
Trend Micro has higher revenue and earnings than Varonis Systems. Varonis Systems is trading at a lower price-to-earnings ratio than Trend Micro, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Trend Micro and Varonis Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Trend Micro | 12.30% | 28.58% | 8.73% |
| Varonis Systems | -20.55% | -19.18% | -5.97% |
Analyst Recommendations
This is a summary of current ratings for Trend Micro and Varonis Systems, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Trend Micro | 1 | 0 | 0 | 1 | 2.50 |
| Varonis Systems | 1 | 7 | 16 | 0 | 2.62 |
Varonis Systems has a consensus target price of $49.79, suggesting a potential upside of 3.40%. Given Varonis Systems’ stronger consensus rating and higher probable upside, analysts clearly believe Varonis Systems is more favorable than Trend Micro.
Volatility and Risk
Trend Micro has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Varonis Systems has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.
Insider and Institutional Ownership
0.1% of Trend Micro shares are owned by institutional investors. Comparatively, 95.7% of Varonis Systems shares are owned by institutional investors. 3.0% of Varonis Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Trend Micro beats Varonis Systems on 9 of the 15 factors compared between the two stocks.
About Trend Micro
Trend Micro Incorporated develops and sells security-related software for computers and related services in Japan and internationally. The company offers platforms, such as vision one platform, attack surface management, extended detection and response (XDR), cloud security, endpoint security, network security, email security, OT/ICS security, and threat intelligence. It also provides services packages, managed XDR, incident response, and support services. Additionally, the company serves 5G networks, healthcare, manufacturing, oil and gas, electric utility, and automotive industries. The company was incorporated in 1965 and is headquartered in Tokyo, Japan.
About Varonis Systems
Varonis Systems, Inc. provides software products and services that allow enterprises to manage, analyze, alert, and secure enterprise data in North America, Europe, the Middle East, Africa, and internationally. Its software enables enterprises to protect data stored on premises and in the cloud, including sensitive files and emails; confidential personal data belonging to customers, and patients and employees' data; financial records; source code, strategic and product plans; and other intellectual property. It offers DatAdvantage that captures, aggregates, normalizes, and analyzes every data access event for users on Windows and UNIX/Linux servers, storage devices, email systems, intranet servers, cloud applications, and data stores; and DatAlert that profiles users, devices, and their behaviors related to systems and data, detects and alerts on deviations that indicate compromise, and provides a web-based dashboard and investigative interface. It also provides data Classification engine that identifies and tags data based on criteria set in various metadata dimensions, as well as provides business and information technology (IT) personnel with actionable intelligence about data; and DataPrivilege. In addition, the company offers Data Transport Engine, an execution engine that unifies the manipulation of data and metadata, translating business decisions, and instructions into technical commands, such as data migration or archiving; and DatAnswers that provides search functionality for enterprise data. It serves its products to financial services, public, healthcare, industrial, technology, insurance, energy and utilities, consumer and retail, education and construction, and engineering sectors. The company sells its products through a network of distributors and resellers. Varonis Systems, Inc. was incorporated in 2004 and is headquartered in New York, New York.