The firm cut price target to reflect lower estimates for 2016 as Vasco will try and make up some of the estimated $50 million in revenues in 2015 from Rabobank that will not repeat in 2016.
Yesterday, VASCO announced its 2015 second quarter financial results with earnings of $0.35 per share on revenue of $65.4 million. This compares to earnings of $0.18 per share on revenue of $47.7 million for the same period one year ago.
VASCO reaffirmed full-year revenue guidance of $230 million to $240 million, and will have to hit the high end in order to reach analysts' estimates of $239 million.
"We remind investors that while the ST earnings outlook is more muted with the completion of the Rabobank deployment, we also know that big deals can surface at any time from VDSI's 2,000 banking customers," Topeka analysts said.
VASCO is an IT security company that designs, develops and markets security solutions that secure and manage access to digital assets and protect transactions.
Shares of VASCO closed down 22.98% to $20.45 in afternoon trading on Wednesday.
Separately, 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 the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VDSI's very impressive revenue growth greatly exceeded the industry average of 11.5%. 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 129.91% 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