Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, digital phototography e-tailer Shutterfly (NAS: SFLY) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Shutterfly's business and see what CAPS investors are saying about the stock right now.
Redwood City, Calif. (1999)
CEO Jeffrey Housenbold (since 2005)
CFO Mark Rubash (since 2007)
Return on Equity (Average, Past 3 Years)
$75.9 million / $0
Eastman-Kodak (NYS: EK)
American Greetings (NYS: AM)
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 47% of the 270 members who have rated Shutterfly believe the stock will underperform the S&P 500 going forward. These bears include All-Star Guin3666, who is ranked in the top 15% of our community, and Jeffrey2012.
Earlier this month, Guin3666 touched on Shutterfly's seemingly unsustainable stock price: "Not the kind of company that can hold valuation in a slowing economy."
In fact, Shutterfly currently sports a rather lofty price-to-sales multiple of 5.4. That represents a clear premium to industry peers like Kodak (0.1), American Greetings (0.5), and Time Warner (NYS: TWX) (1.2).
CAPS member Jeffrey2012 elaborates on the Shutterfly bear case:
This company is clearly a fad and when the tide recedes, they will clearly take a serious hit. Charging money to make some gift cards online is not exactly the greatest business model. The only reason why I can see this company even going to ever astronomical values is due to the fact they have a social expression component in the business. I bet if there were rumors of facebook or some other ridiculous social company wanting to purchase them, they would probably be worth 10-20 billion too.
As you can see, I believe this is clearly a bubble in the making and their bubble burst will clearly make a lot of sad investors face reality.
What do you think about Shutterfly, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
Interested in another easy way to track Shutterfly?Add it to your watchlist.
At the time thisarticle 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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