I told you before the VASCO (Nasdaq: VDSI) earnings report that the stock was undervalued and belonged in your portfolio. With the results in hand, and the subsequent 34% share price crash, I'm hoping that you subscribe to the "buying in thirds" philosophy, so you can take advantage of an even better value proposition.

Here's what happened, and why I still believe in the data security specialist.

Fourth-quarter revenue came up a bit light at $31.2 million, about $5 million below the analyst consensus. With fixed costs escalating as VASCO goes through a growth spurt, the slow sales resulted in a large miss on the bottom line. So far, so bad.

But management explained that most of the top-line letdown was because of three large orders that were delayed for various reasons. That netted out to a $3.6 million hit, all of which should show up in the first quarter and beyond. While the tardy threesome weren't named, the usual suspects would include major customers like mega-banks HSBC (NYSE: HBC), Citibank (NYSE: C), and Wachovia (NYSE: WB), or truck makers Daimler (NYSE: DAI) and Volvo.

CEO Ken Hunt reminded us that his company doesn't try to smooth out its quarterly trends, but that "we do our best to accommodate the wishes of our customers." Indeed, one of the delays was on request from the customer, to fit into its deployment schedule. It should also be noted that the company hit its own guidance, which was reaffirmed in late October, so much of the disappointment was with unrealistic Street expectations and not the business itself.

You're looking at a small-cap business with lumpy earnings, subject to the whims of a few clients. Hunt is a straight shooter who doesn't pander to short-sighted Wall Street expectations but manages his company for long-term success -- even if it makes the numbers look bad on occasion. Unpredictable numbers are part and parcel of small-cap investing -- and Mr. Market's mood swings are amplified manifold when he's dealing with smaller businesses.

This is still a risky stock, no doubt. But the business is still going great and the revenue shortfall will be made up in the next couple of quarters. I don't see that the future looks any dimmer than it did one day ago. In other words, the time to jump on this opportunity is now, before a first-quarter blowout erases some of today's generous discount.

Further Foolishness:

VASCO is a recent addition to Motley Fool Stock Advisor's market-beating list of recommendations.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always inexpensive but never cheap.