Varonis Systems, Inc. (NASDAQ:VRNS), might not be a large cap stock, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Varonis Systems’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Varonis Systems

What Is Varonis Systems Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 12% below our intrinsic value, which means if you buy Varonis Systems today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $57.62, then there’s not much of an upside to gain from mispricing. In addition to this, Varonis Systems has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Varonis Systems generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 28% over the next couple of years, the future seems bright for Varonis Systems. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? VRNS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on VRNS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.