Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 10.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- VDSI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.61, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for VASCO DATA SEC INTL INC is rather high; currently it is at 64.10%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.40% trails the industry average.
- VASCO DATA SEC INTL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VASCO DATA SEC INTL INC increased its bottom line by earning $0.61 versus $0.28 in the prior year. For the next year, the market is expecting a contraction of 40.2% in earnings ($0.37 versus $0.61).
- Net operating cash flow has significantly decreased to -$5.57 million or 2471.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
VASCO Data Security International, Inc., through its subsidiaries, designs, develops, markets, and supports hardware and software security systems that manage and secure access to information assets worldwide. The company has a P/E ratio of 10.3, below the average computer software & services industry P/E ratio of 12.5 and below the S&P 500 P/E ratio of 17.7. Vasco Data Security International has a market cap of $276.2 million and is part of the technology sector and computer software & services industry. Shares are up 7.2% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff
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