1-Star Stocks Poised to Plunge: Carbonite?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online backup solutions specialist Carbonite (NAS: CARB) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Carbonite's business and see what CAPS investors are saying about the stock right now.

Carbonitefacts

Headquarters (founded)Boston (2005)
Market Cap$233.8 million
IndustryInternet software and services
Trailing-12-Month Revenue$66.2 million
ManagementCo-Founder/Chairman/CEO David Friend
CFO Andrew Keenan
Trailing-12-Month Return on Capital(384.4%)
Cash/Debt$68.1 million / $0
CompetitorsAcronis
NovaStor
Symantec

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 47% of the 36 members who have rated Carbonite believe the stock will underperform the S&P 500 going forward.

A couple of weeks ago, one of those Fools, All-Star BlacknGold, touched on Carbonite's seemingly unsustainable valuation:

With a fair book value of $0.78 this company is greatly overvalued. The red ink continues to get darker each quarter and shareholders' equity stands at only $20 million as of 1Q12. Furthermore, their product is easily replicated (no moat or competitive advantage). Should be an easy red-thumb target.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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