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VASCO (VDSI) to Report Q2 Earnings: What's in the Offing?

Zacks Equity Research
Updated

Leading security software firm VASCO Data Security International Inc. VDSI is set to report second-quarter 2017 results after market close on Jul 27. The company has a solid earnings surprise history, beating estimates in each of the last four quarters with a positive average earnings surprise of 80.6%.

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 to develop mobile application security solutions. The synergies of the deal will likely augment the company’s top line in the to-be-reported quarter.

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During the last quarter, VASCO announced its ability to help organizations detect and mitigate mobile application overlay attacks through added functionality in the DIGIPASS for Apps Runtime Application Self-Protection module. This module 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 might lead to higher expenses, 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 0.00%. This because both the Zacks Consensus Estimate and Most Accurate estimate stand at 8 cents.

VASCO Data Security International, Inc. Price and EPS Surprise

 

VASCO Data Security International, Inc. Price and EPS Surprise | VASCO Data Security International, Inc. Quote

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

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:

AGCO Corporation AGCO, with an Earnings ESP of +2.89% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agenus Inc. AGEN with an Earnings ESP of +5.56% and a Zacks Rank #2.

Align Technology, Inc. ALGN with an Earnings ESP of +1.37% and a Zacks Rank #2.

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VASCO Data Security International, Inc. (VDSI) : Free Stock Analysis Report
 
AGCO Corporation (AGCO) : Free Stock Analysis Report
 
Agenus Inc. (AGEN) : Free Stock Analysis Report
 
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
 
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