Needham & Company downgraded Varonis Systems (NASDAQ: VRNS) from Buy to Hold.

Analyst Scott Zeller commented, "The Varonis MarQ results were roughly in-line on revenue, yet had a larger than expected loss. The big news, however, was the weak guidance for JuneQ and the lowering of CY15 guidance – after a disappointing guide on the last earnings call. While Varonis is still a growth company, growing +32% y/y in MarQ, the company is clearly decelerating; investors will likely be concerned about the deceleration, given the aggressive S&M spending and the fact VRNS plays in both security and big data – two of the strongest areas of IT spending. Challenges in EMEA (UK, FRA, and RUS) are a clear headwind, and management expects a “fix” is a few quarters away. Shares were down materially in aftermarket, -15% near $22.50, or 3.3x EV/CY16 revenue. Lowering estimates materially, downgrade to HOLD."

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Shares of Varonis Systems closed at $26.68 yesterday.