Back to top

Image: Bigstock

VASCO (VDSI) Q1 Earnings: What's in Store for the Stock?

Read MoreHide Full Article

Leading security software firm VASCO Data Security International Inc.  is set to report first-quarter 2017 results after market close on Apr 27. The company topped estimates in each of the last four quarters with a positive average earnings surprise of 118.13%.

Let’s see how things are shaping up for this announcement.

Key Factors to Consider

VASCO is a global leader in authentication, electronic signatures and identity management. The company’s strategic investment in Promon AS helps both the firms work together to develop mobile application security solutions. The synergies of the deal will likely help augment the company’s top line in the to-be-reported quarter.

During the last quarter, VASCO announced the availability of its eSignLive Digital Mortgage Solution, a cloud based eMortgage solution. The components of the solution include e-signatures, e-Delivery, e-Closing and e-Vaulting. It can be used as standalone application to help ensure regulatory compliance and enhance customer experience with a completely digital mortgage process. This is expected to augment the company’s revenues in the quarter.

The company continues to make investments to build its capabilities in sales, marketing and R&D. It remains focused on generating high operating margins, driven by continuous investments and a shift in the product mix with higher gross-margin products. However, these investments may lead to higher expenses, in turn curbing its profitability in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively show that VASCO is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to post an earnings beat. However, this is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at 0.00%. This is because both Zacks Consensus Estimate and Most Accurate estimate stand at 4 cents.

Zacks Rank: VASCO’s Zacks Rank #3, when combined with 0.00% ESP makes earnings beat uncertain this quarter.

We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Methanex Corporation (MEOH - Free Report) , with an Earnings ESP of +13.04% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.

Pepsico, Inc. (PEP - Free Report) with an Earnings ESP of +1.10% and a Zacks Rank #3.

Ensco plc with an Earnings ESP of +22.22% and a Zacks Rank #3.

Zacks’ Best Private Investment Ideas                                                                             

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.                                                                              

Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.                                                                                                                                                

Click here for Zacks' private trades >>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


PepsiCo, Inc. (PEP) - $25 value - yours FREE >>

Methanex Corporation (MEOH) - $25 value - yours FREE >>

Published in