Critical Comparison: Progress Software (PRGS) versus Varonis Systems (VRNS)

Progress Software (NASDAQ:PRGS) and Varonis Systems (NASDAQ:VRNS) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Progress Software and Varonis Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Progress Software 15.30% 28.94% 14.54%
Varonis Systems -10.52% -23.77% -10.68%

Analyst Recommendations

This is a breakdown of recent ratings for Progress Software and Varonis Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Progress Software 0 2 2 0 2.50
Varonis Systems 0 3 11 0 2.79

Progress Software currently has a consensus target price of $40.33, indicating a potential upside of 23.95%. Varonis Systems has a consensus target price of $74.57, indicating a potential upside of 22.25%. Given Progress Software’s higher probable upside, analysts plainly believe Progress Software is more favorable than Varonis Systems.

Earnings and Valuation

This table compares Progress Software and Varonis Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Progress Software $397.57 million 3.67 $37.41 million $1.72 18.92
Varonis Systems $217.36 million 8.20 -$13.69 million ($0.50) -122.00

Progress Software has higher revenue and earnings than Varonis Systems. Varonis Systems is trading at a lower price-to-earnings ratio than Progress Software, indicating that it is currently the more affordable of the two stocks.

Dividends

Progress Software pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Varonis Systems does not pay a dividend. Progress Software pays out 32.6% of its earnings in the form of a dividend.

Volatility and Risk

Progress Software has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Varonis Systems has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Institutional and Insider Ownership

92.0% of Progress Software shares are owned by institutional investors. Comparatively, 82.8% of Varonis Systems shares are owned by institutional investors. 2.0% of Progress Software shares are owned by company insiders. Comparatively, 4.2% of Varonis Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Progress Software beats Varonis Systems on 11 of the 16 factors compared between the two stocks.

About Progress Software

Progress Software Corporation provides software solutions for various industries worldwide. It operates through three segments: OpenEdge; Data Connectivity and Integration; and Application Development and Deployment. The OpenEdge segment offers Progress OpenEdge, a development software, which builds multi-language applications for secure deployment across various platforms and devices, as well as cloud; Progress Corticon, a business rules management system that enables applications with decision automation and change process, and decision-related insight capabilities; DataRPM, which provides maintenance solutions for industrial IoT; and Kinvey that offers cloud backend as a service technology. The Data Connectivity and Integration segment provides Progress DataDirect Connect software, which offers data connectivity using industry-standard interfaces to connect applications running on various platforms; and Progress DataDirect Hybrid Data Pipeline, a data access service that provides cloud and on-premises data sources for hybrid cloud applications, such as CRM, data management platforms, and hosted analytics. The Application Development and Deployment segment offers Dev Tools, a cross-platform, user experience design, quality assurance, debugging, and reporting suite; NativeScript, an open-source application development platform; Test Studio, an application lifecycle management suite for testing Web, mobile, and desktop applications; and Sitefinity, a Web content management and customer analytics platform. The company also provides project management, implementation, custom development, programming, and other services, as well as services to Web-enable applications; and training services. It sells its products directly to end users, as well as indirectly to application partners, original equipment manufacturers, and system integrators. Progress Software Corporation was founded in 1981 and is headquartered in Bedford, Massachusetts.

About Varonis Systems

Varonis Systems, Inc. provides software solutions that protect data from insider threats and cyberattacks. The company, through its software, allows organizations to protect data stored on premises and on cloud, such as sensitive files and emails; confidential customer, patient and employee data; financial records; strategic and product plans; and other intellectual property. It offers DatAdvantage that captures, aggregates, normalizes, and analyzes every data access event for every user on Windows and UNIX/Linux servers, storage devices, email systems, and Intranet servers; DataPrivilege, which provides a self-service Web portal that allows users to request access to data necessary for their business functions, and owners to grant access without IT intervention; and Data Classification Engine that identifies and tags data based on criteria set in multiple metadata dimensions and provides business and IT personnel with actionable intelligence about data. Varonis Systems, Inc. also provides Data Transport Engine, which provides 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; DatAnswers that provides secure, relevant, and timely search functionality for enterprise data; and DatAnywhere provides its customers' employees hybrid-cloud experience using its existing storage infrastructure. The company sells its products and services through a global network of distributors and Value Added Resellers. It serves IT and business personnel. Varonis Systems, Inc. was incorporated in 2004 and is headquartered in New York, New York.

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