Short Term Risks Behind Citi's Varonis Systems (VRNS) Target Price Downward Revision

Varonis Systems Inc (NASDAQ:VRNS) is one of the 15 software stocks with the highest upside potential. On January 13, Citi analyst Fatima Boolani reiterated her Hold rating while lowering the firm’s price target for Varonis Systems Inc (NASDAQ:VRNS) stock from $40 to $37. The adjusted price target implies a 5.96% upside from current levels. Additionally, the analyst also initiated a “downside 90-day catalyst watch” on Varonis. The firm noted that competitive pressures in the data security market are intensifying. According to the firm, these pressures pose a potential risk to the company’s upcoming earnings report. Citi’s more cautious short-term outlook for the stock was driven by this risk.

Cantor Fitzgerald cut its price target for the stock from $60 to $50 on January 7. However, analyst Jonathan Ruykhan maintained his Buy rating for the shares. The analyst discussed the firm’s 2026 outlook for Security & Infrastructure Software in a research note to investors. The outlook highlights increasing demand driven by artificial intelligence, signs of improving deal sizes, and broad optimism around short-term cybersecurity spending. Cantor Fitzgerald also anticipates identity, cloud, and AI security to be the fastest-growing areas within the sector.

Varonis Systems, Inc. (NASDAQ:VRNS) operates as a software products and services provider. The company’s software protects both unstructured and structured data across laaS, SaaS, and on-premises environments. It works with organizations across healthcare, technology, financial services, manufacturing, education, and other industries.

While we acknowledge the potential of VRNS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT:  Cathie Wood’s Stock Portfolio: Top 10 Stocks to Buy and 30 Most Fantastic Stocks Every Investor Should Pay Attention To.

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