Varonis Systems is expected to bounce back in the second half of 2024 amid rising demand for data security, according to JPMorgan. Analyst Brian Essex upgraded the stock to overweight from neutral and raised his December 2025 price target to $54 from $50. The new target suggests an upside of about 29% from Thursday’s closing price. The stock has fallen 6.7% this year as data security stocks have declined broadly, presenting an attractive buying opportunity for investors heading into the second half of the year, the analyst said in a note on Friday. VRNS YTD Mt. Varonis YTD “Expectations are reasonable and demand for data security is accelerating, supported by catalysts for renewals in Q3 and Q4, improving fundamentals from migration execution, and recently introduced [managed data detection and response software]”We may also see an AI tailwind as we head into FY25,” Essex said. Demand for data security is growing due to an expected rise in ransomware attacks, with a breach potentially occurring every two seconds in 2031, according to Essex. That would be up from 11 seconds in 2021, according to data cited by Cybersecurity Ventures. As such, companies need to protect data exposed to these attacks, he said, especially as generative artificial intelligence becomes more widely adopted. The analyst added that “while increased demand is driving increased competition across the data security space, we believe Varonis is one of the companies best positioned to capitalize on data security demand with its best-of-breed data security platform.” Varonis reported better-than-expected quarterly results in early May, posting a loss of 3 cents per share on revenue of $114 million, while analysts surveyed by FactSet were expecting a loss of 9 cents per share on revenue of $113.7 million.
Data security stocks are a great pick for the second half of the year as AI boosts them
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