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For many, the main point of investing in the stock market is to achieve spectacular returns. And we've seen some truly amazing gains over the years. Just think about the savvy investors who held Varonis Systems, Inc. (NASDAQ:VRNS) shares for the last five years, while they gained 549%. And this is just one example of the epic gains achieved by some long term investors. On top of that, the share price is up 27% in about a quarter.
It really delights us to see such great share price performance for investors.
Varonis Systems wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
For the last half decade, Varonis Systems can boast revenue growth at a rate of 17% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 45%(per year) over the same period. It's never too late to start following a top notch stock like Varonis Systems, since some long term winners go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Varonis Systems is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Varonis Systems stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
It's nice to see that Varonis Systems shareholders have received a total shareholder return of 75% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 45% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Varonis Systems better, we need to consider many other factors. For example, we've discovered 4 warning signs for Varonis Systems that you should be aware of before investing here.
But note: Varonis Systems may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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