Dougherty & Co Downgrades VASCO Data Security (VDSI) to Neutral
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Dougherty & Co downgraded VASCO Data Security (NASDAQ: VDSI) from Buy to Neutral and removed its price target (prior $20.00). The change follows its Q3 pre-announcement and reduced FY guidance.
Analyst Joe Maxa said, "VDSI's revised outlook reflects lengthened sales cycles, primarily in the European region "as some large banking customers are adapting to market pressures and the need for digital transformation." In other words, banks in Europe are looking to cut costs (branch closures, layoffs, focus on driving customers online/mobile) and POs to VDSI have been delayed in the process. In the end, we believe this will be positive for VDSI as it is well positioned in the European market and has the tools banks need to protect online and mobile users from hacking attempts, fraud, etc. VDSI management believes the delays are short-term in nature which suggests our new FY17 estimate may prove conservative. However, visibility is limited and we prefer to see indications of top line growth before getting more constructive."
Shares of VASCO Data Security closed at $17.94 yesterday.
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