Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of VASCO Data Security International, (NASDAQ: VDSI ) jumped 24% Tuesday after the company turned in better-than-expected fourth quarter results.
So what: Quarterly revenue rose 11% to $43.3 million, which translated to 55% net income growth from continuing operations to $0.09 per diluted share. Including the impact of discontinued operations, net income was $0.08 per diluted share. By contrast, analysts were looking for earnings of just $0.06 per share on revenue of $40 million.
Now what: For the full year 2014, VASCO expects revenue from their traditional business -- which excludes its new DIGIPASS and MYDIGIPASS.COM service product offerings -- to be $160 million to $165 million, or well ahead of Wall Street's expectations for total 2014 revenue of $160.5 million. Meanwhile, VASCO also expects operating income as a percentage of revenue to be in the range of 11% to 13%.
All things considered, shares of VASCO may not look particularly cheap trading around 22 times this year's expected earnings, but I think it's a well-deserved premium given VASCO's expected earnings growth. If VASCO can maintain even a fraction of its momentum going forward, don't be surprised if it continues to reward patient long-term investors from here.
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