Data company stock is a sell

Vasco Data (NASDAQ: VDSI, Stock Forum) has had a remarkable run. Over the last three years, its annualized revenue growth has been almost 70%. It looks like that has come to an end.

Jefferies upgraded Vasco after its recent earnings announcement but that has not helped the stock, which trades at $11.89, down from a 52-week high of $44.25.

In the first quarter, revenue growth was remarkably slow for a company that had been such a high flier. It moved from $26.4 million last year to $28.9 million. Net income was flat at $4.9 million.

Vasco has made a big mistake, and it is unclear whether it can be fixed. It has concentrated its business of protected electronic databases in Europe and has targeted the financial sector there. With a near depression in that business in that region, the company has to get into other markets quickly.

If it can't, the stock is still a sell at these levels.

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