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VASCO Data Security International Inc. Message Board

  • hookedonfawnicks hookedonfawnicks Oct 28, 2005 10:17 AM Flag

    Missed by one day


    Predicted the results would take at least $2 off the stk price immediately but it looks like it's taking longer for the numbers and CC to get absorbed. Margin dropped 10 points and CC confirmed that margins will continue to decline to drive the top line. Will help improve market share for the long term but will hurt bottom line. This huge PE cannot be justified.

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    • Get on board with the learning curve for high volume businesses. Each time the GO 3 volume doubles, VDSI's costs for the GO 3 will decline shaply. Thus there won't be any margin loss for the GO 3's. The conf. call stated the ASP of the GO 3 is about $7.50. The reason (they even talked about it on the conf. call) the margins were lower was simply a mix ratio relative to last year's 3rd quarter comparison. The volume of GO 3's was way up this quarter relative to VDSI's other higher margin products, and thus the overall gross margin was 61% -- that's a hell of a margin, i.e., Intel-like. They were shy about talking about the card reader margins(I would not talk about those high margins either.), but they are much higher and they will see high volume when some banks and online vendors get onboard after some trials.

      As the volume grows on GO 3 and other products and the overhead does not grow as much, the huge revenue will drop right through to the profit bottom line. They forecast a 13% to 18% profit growth (as I recall). I think it is quite conservative.

    • what is fair value ,you think?

16.625+0.125(+0.76%)9:35 AMEDT