Varonis Systems (NASDAQ:VRNS – Get Free Report) and Synopsys (NASDAQ:SNPS – Get Free Report) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Profitability
This table compares Varonis Systems and Synopsys’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Varonis Systems | -20.55% | -19.18% | -5.97% |
| Synopsys | 11.43% | 6.24% | 3.95% |
Earnings & Valuation
This table compares Varonis Systems and Synopsys”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Varonis Systems | $623.53 million | 8.91 | -$129.32 million | ($1.23) | -39.31 |
| Synopsys | $7.05 billion | 11.22 | $1.33 billion | $5.66 | 72.98 |
Synopsys has higher revenue and earnings than Varonis Systems. Varonis Systems is trading at a lower price-to-earnings ratio than Synopsys, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
95.7% of Varonis Systems shares are held by institutional investors. Comparatively, 85.5% of Synopsys shares are held by institutional investors. 3.0% of Varonis Systems shares are held by company insiders. Comparatively, 0.6% of Synopsys shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Varonis Systems and Synopsys, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Varonis Systems | 1 | 7 | 16 | 0 | 2.62 |
| Synopsys | 1 | 4 | 13 | 0 | 2.67 |
Varonis Systems currently has a consensus price target of $49.79, indicating a potential upside of 2.98%. Synopsys has a consensus price target of $562.67, indicating a potential upside of 36.22%. Given Synopsys’ stronger consensus rating and higher probable upside, analysts plainly believe Synopsys is more favorable than Varonis Systems.
Risk & Volatility
Varonis Systems has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Synopsys has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.
Summary
Synopsys beats Varonis Systems on 11 of the 14 factors compared between the two stocks.
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.
About Synopsys
Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits. It operates in three segments: Design Automation, Design IP, and Software Integrity. The company offers Digital and Custom IC Design solution that provides digital design implementation solutions; Verification solution that offers virtual prototyping, static and formal verification, simulation, emulation, field programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions. It also provides intellectual property (IP) solutions for USB, PCI Express, DDR, Ethernet, MIPI, HDMI, and Bluetooth low energy applications; logic libraries and embedded memories; processor cores, software, and application-specific instruction-set processor tools for embedded applications; security IP solutions; IP solutions for automotive market; and system-on-chip (SoC) infrastructure IP, datapath and building block IP, and verification IP products, as well as mathematical and floating-point components, and Arm AMBA interconnect fabric and peripherals. In addition, the company offers HAPS FPGA-based prototyping systems; virtual prototyping solutions; and Platform Architect solutions for SoC architecture analysis and optimization, as well as optical products, and mechatronic simulations. Further, it provides security and quality testing products, managed services, programs and professional services, and training that enable its customers to detect and remediate security vulnerabilities, and defects in the software development lifecycle, as well as manufacturing solutions. Additionally, the company provides intelligent orchestration solution, software risk manager, and black duck software composition analysis tools. It serves electronics, financial services, automotive, medicine, energy, and industrial areas. The company was incorporated in 1986 and is headquartered in Sunnyvale, California.
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