Vasco’s Stock Fell 16%: Who Are They & What Happened?
Vasco Data Security International (NASDAQ: VDSI) is a small-cap information technology that designs, develops and markets security solutions that secure and manage access to digital assets.
On Wednesday the company’s stock lost more than 16 percent after management provided an update to its third quarter financial results.
Vasco Data said that it now expects its third quarter revenue to fall in a range of $42 million to $44 million and expects to earn $0.07 to $0.09 per share. Wall Street analysts were modeling the company to report revenue of $52 million but earn just four cents per share.
The mixed guidance was overshadowed by the second part of the company’s financial update in which management lowered its outlook for the entire year.
Specifically, Vasco Data now expects its full year revenue to fall in a range of $185 million to $195 million after previously guiding its revenue to a range of $205 million to $215 million. In addition, management expects its operating income as a percentage of revenue to be lower than the 10 percent to 12 percent range which was previously communicated to investors.
“Our third quarter results were negatively impacted primarily by the extension of sales cycles in the European region as some of our large banking customers are adapting to market pressures and the need for digital transformation. As a result, they are delaying the placement of orders until future quarters,” said T. Kendall Hunt, VASCO Chairman & CEO. “Although we are dissatisfied with our third quarter performance, we continue to remain optimistic about the demand for our core hardware products and strong growth of our DIGIPASS for Apps mobile application security solution. We remain confident in our business strategy and in the strength of our long-term growth opportunities, particularly our software solutions and combined platform.”
Vasco Data had some momentum after it exited the second quarter. The company reported on July 28 that it earned $0.15 per share in its second quarter on revenue of $54.3 million. Both of these metrics were higher than the eight cents per share and $54.3 million in revenue Wall Street analysts were expecting.
Vasco’s stock was trading at around $17 per share on July 28 and rose over the coming months as high as $21.35.
However, Wednesday’s update sent shares plummeting as low as $14.02 marking its lowest level since March of this year. The stock did recover some of its losses and closed the at $15.01.
Shares are now lower by more than 15 percent over the past year.