Judging from the email I received when I last wrote about American Science & Engineering (NASDAQ:ASEI), people have strong feelings about this company -- either positive or negative. The bulls believe that the increasing requirement for security at our seaports, airports, and borders will continue to drive strong sales growth and earnings, while the bears seem to believe that the last year has been so strong that the company will be hard-pressed to match it. The result is that AS&E, which grew yearly revenues by 85% and earnings by 150%, is selling at a P/E ratio of just 18. Clearly, some skepticism is weighing on the stock.

Despite the skeptics (and my own worries about inventory and insider selling), there was certainly not a big problem with their fourth-quarter results, in my opinion. Revenues reached their second-highest quarterly total ever, checking in at $40.7 million -- 51% higher than a year ago. Earnings for the quarter totaled $0.51 per share, which was quite a bit weaker than the $0.76 estimate from the analysts, but a change in warrant valuation reduced the EPS number by $0.43 per share.

So the big question is whether AS&E can maintain strong growth in the future. It certainly has some growth drivers in place: Several of its OmniView Gantry systems are included in a $45 million contract to a Middle Eastern customer, and management has introduced a new parcel search system called Gemini for searching suitcases, briefcases, and purses. Furthermore, things appear to be progressing with the Transportation Security Administration's evaluation of AS&E's personnel screening system called SmartCheck.

There are basically two difficulties that I see for AS&E over the next year. The first is that unlike its Z Backscatter Van (ZBV) product, it faces competition from both OSI Systems (NASDAQ:OSIS) and L-3 Communications (NYSE:LLL) with its new products -- and therefore the company most likely won't command the same margins as the ZBV. Management confirmed as much during the conference call and said they may have to compete on price with these products.

The second difficulty involves maintaining or increasing the level of ZBV sales. About 40% of the 180 ZBVs sold so far have been to the U.S. government, but will Uncle Sam continue placing large orders? If not, AS&E will likely have to find another big customer.

I certainly can't claim to know whether strong growth will continue this year, but I definitely like the stock a lot better at $60 per share than I did at $90. Uncertainty is unavoidable in investing, but if you own this stock, you can take comfort in the fact that the potential gain is much larger than the potential loss.

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Fool contributor Dan Bloom doesn't own shares of any stocks mentioned in this column. Feel free to email your comments to him.