1-Star Stocks Poised to Plunge: Carbonite?
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.
|Headquarters (founded)||Boston (2005)|
|Market Cap||$233.8 million|
|Industry||Internet software and services|
|Trailing-12-Month Revenue||$66.2 million|
|Management||Co-Founder/Chairman/CEO David Friend|
CFO Andrew Keenan
|Trailing-12-Month Return on Capital||(384.4%)|
|Cash/Debt||$68.1 million / $0|
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.
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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