Varonis Systems (VRNS) stock experienced a sharp decline of 22.73% during pre-market trading on Wednesday. The significant drop followed the company's latest financial update, which triggered negative sentiment among investors and analysts.
The sell-off was primarily driven by Varonis's fiscal 2026 earnings guidance, which fell short of analyst projections. While the company reported better-than-expected fourth-quarter 2025 results, its forward-looking statements disappointed the market. The weak outlook prompted a wave of price target reductions from multiple brokerage firms, reflecting concerns over the company's near-term profitability.
Analysts from firms including TD Cowen, Jefferies, Barclays, RBC, Morgan Stanley, Citi, UBS, Needham, and D.A. Davidson all lowered their price targets on Varonis stock following the guidance announcement. This collective downward revision by the analyst community contributed to the pre-market selling pressure as investors reassessed the stock's valuation.