The Big Overreaction To Vasco Data Securities Earnings!

Anyone who held Vasco Data Securities (vdsi) yesterday is down a whopping 33.95% today! Talk about pain, that was one of the worst days I have ever seen for any stock. So, you might think that this stock is done, over, and just going to keep going down, but I am here to tell you that this is not going to happen.

This was the biggest overreaction to an earnings report that I can remember in recent times. The drooling analysts were looking for 17 cents per share and Vasco came in at 15 cents. That was an amazing 79% over last years earnings. Their revenues came in at 30 million which was below anayists' expectations, but was still a 60% increase over last years revenues. Vasco Data Securities won 608 new customers in the third quarter, including 106 banks and 502 enterprise security customers.
With the 15 cents a share in earnings Vasco's P/E ratio is only 44 based on it's current price of $26.13, which is low for a company that can grow at 79%. Vasco's backlog of orders also grew to an all time high of 33.4 million for the fourth quarter. My point is that the long term story with Vasco is still in tack. They re-affirmed their guidance of full-year revenues to rise 55 percent to 65 percent. Vasco Data (vdsi) also sees gross profit as a percentage of revenue for 2007 to be in the range of a very healthy 60 percent to 68 percent!

I have been a bull of this stock for a long, long time now and I did watch it's valuation get a little a head of itself, but this almost 35% sell off in the stock is just unjustified. This stock may be in for a rough ride the next couple of days, but this is an opportunity that I would jump on soon before the smoke clears.

To learn more about Vasco Data Securities visit their website and to see what I thought going into earnings check out this post!

If you are still looking for more information about the company listen to what the CEO T. Kendall Hunt has to say in this presentation in Chicago...