Why LifeLock Is Poised to Keep Plunging

Before you go, we thought you'd like these...
Before you go close icon

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, identity theft protection company LifeLock has received the dreaded one-star ranking.

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

LifeLockfacts

Headquarters (founded)

Tempe, Ariz. (2005)

Market Cap

$801.0 million

Industry

Application software

Trailing-12-Month Revenue

$276.4 million

Management

Co-Founder/Chairman/CEO Richard Davis

CFO Chris Power

Trailing-12-Month Return on Equity

27.8%

Cash/Debt

$134.2 million / $0

Competitors

Equifax

Intersections


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

On CAPS, 62% of the 29 members who have rated LifeLock believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, SaiyanBroker, succinctly summed up the LifeLock bear case for our community:

The company has had a nice annual sales growth rate and EBITDA is on the climb. However, I'm very hesitant about the long term potential for this company.

The target market, I wager, has had near maximum exposure to this service meaning future sales growth will mostly rest on continuing customers rather than new ones. As is the case with most companies like this, I expect job cuts due to declining sales forecasts, resulting higher pressure from sales departments to sell new products to dedicated customers, resulting in a declining consumer base (especially when a newer security company looks like a fresh alternative). We will see what happens.

P/BV and P/S are also valued way too high right now. ... This company is simply not worth what the market is currently spotting it at.

If you want market-topping returns, you need to protect your portfolio from any undue risk. Luckily, we've found another growth play we are incredibly excited about -- excited enough to dub it "The Only Stock You Need to Profit from the NEW Technology Revolution." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why LifeLock Is Poised to Keep Plunging originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners