NEW YORK (TheStreet) -- Vasco Data Security International (VDSI) shares are up 4% to $29.64 in trading on Monday as data security firms enjoy gains following a U.S. government data breach that compromised the personal files of up to 4 million current and former federal employees.

Federal officials said Friday that the hackers that accessed the sensitive data were based in China, but stopped short of directly accusing the Chinese government of being involved.

Rep. Michael McCaul, chairman of the House Homeland Security Committee, told CBS' Sunday news show Face the Nation that the hack was "the most significant breach of federal networks in history."

Fellow cyber security firm FireEye(FEYE) - Get Report shares are also up 0.92% to $51.50 in afternoon trading.

TheStreet Ratings team rates VASCO DATA SEC INTL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate VASCO DATA SEC INTL INC (VDSI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • VDSI's very impressive revenue growth greatly exceeded the industry average of 5.0%. Since the same quarter one year prior, revenues leaped by 67.8%. 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 4.24, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, VASCO DATA SEC INTL INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 277.77% and other important driving factors, this stock has surged by 162.57% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VDSI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • You can view the full analysis from the report here: VDSI Ratings Report