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VASCO (VDSI) Q3 Earnings: What's in Store for the Stock?
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Leading security software firm VASCO Data Security International Inc. is set to report third-quarter 2016 results after the market closes on Oct 27, 2016. In the last reported quarter, earnings beat the Zacks Consensus Estimate by 9 cents. VASCO also has a solid earnings surprise history, beating estimates in three of the last four quarters with a positive average earnings surprise of 105.16%.
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. During the quarter, the company made a strategic investment in Promon AS. The deal expands an existing business relationship between VASCO and Promon AS. The companies will continue to collaborate in the development of mobile application security solutions. Also, this deal will likely help augment VASCO’s top line in the to-be-reported quarter.
During the to-be-reported quarter VASCO also launched MYDIGIPASS, a comprehensive solution for healthcare organizations and vendors of health IT applications. This new solution also is expected to help VASCO strengthen its foothold in the healthcare market, improving its revenues for the quarter.
Alongside, the company had also announced the launch of its eIDAS-compliant electronic signature solution, which provides European organizations the choice of any Trust Service Provider (TSP). eSignLive delivers both Advanced and Qualified E-Signatures with multi-factor authentication capabilities on a single platform ensuring that organizations can achieve rapid implementation. Such advancements will enable the company to gain an edge over its peers.
The company continues to make investments to build its capabilities in sales, marketing and R&D. It remains focused to generate high operating margins, driven by continuous investments and a shift in the product mix with higher gross-margin products. However, in the to-be-reported quarter, these investments may lead to higher expenses, in turn curbing its profitability.
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.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at 0.00%.
Zacks Rank: VASCO’s Zacks Rank #4 (Sell) when combined with 0.00% ESP makes an earnings beat uncertain this quarter. We believe that Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Stocks to Consider
Here are some companies, which you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Navigant Consulting Inc. , with an Earnings ESP of +6.90% and a Zacks Rank #3.
ABB Ltd. , with an Earnings ESP of + 17.86 and a Zacks Rank #3.
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VASCO (VDSI) Q3 Earnings: What's in Store for the Stock?
Leading security software firm VASCO Data Security International Inc. is set to report third-quarter 2016 results after the market closes on Oct 27, 2016. In the last reported quarter, earnings beat the Zacks Consensus Estimate by 9 cents. VASCO also has a solid earnings surprise history, beating estimates in three of the last four quarters with a positive average earnings surprise of 105.16%.
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. During the quarter, the company made a strategic investment in Promon AS. The deal expands an existing business relationship between VASCO and Promon AS. The companies will continue to collaborate in the development of mobile application security solutions. Also, this deal will likely help augment VASCO’s top line in the to-be-reported quarter.
During the to-be-reported quarter VASCO also launched MYDIGIPASS, a comprehensive solution for healthcare organizations and vendors of health IT applications. This new solution also is expected to help VASCO strengthen its foothold in the healthcare market, improving its revenues for the quarter.
Alongside, the company had also announced the launch of its eIDAS-compliant electronic signature solution, which provides European organizations the choice of any Trust Service Provider (TSP). eSignLive delivers both Advanced and Qualified E-Signatures with multi-factor authentication capabilities on a single platform ensuring that organizations can achieve rapid implementation. Such advancements will enable the company to gain an edge over its peers.
The company continues to make investments to build its capabilities in sales, marketing and R&D. It remains focused to generate high operating margins, driven by continuous investments and a shift in the product mix with higher gross-margin products. However, in the to-be-reported quarter, these investments may lead to higher expenses, in turn curbing its profitability.
VASCO DATA SEC Price and EPS Surprise
VASCO DATA SEC Price and EPS Surprise | VASCO DATA SEC Quote
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.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at 0.00%.
Zacks Rank: VASCO’s Zacks Rank #4 (Sell) when combined with 0.00% ESP makes an earnings beat uncertain this quarter. We believe that Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Stocks to Consider
Here are some companies, which you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Amazon.com, Inc. (AMZN - Free Report) , with an Earnings ESP of +10.47% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Navigant Consulting Inc. , with an Earnings ESP of +6.90% and a Zacks Rank #3.
ABB Ltd. , with an Earnings ESP of + 17.86 and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>