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.
Tempe, Ariz. (2005)
Co-Founder/Chairman/CEO Richard Davis
CFO Chris Power
Trailing-12-Month Return on Equity
$134.2 million / $0
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.
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.
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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.
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