1-Star Stocks Poised to Plunge: BroadSoft? (BSFT)

1-Star Stocks Poised to Plunge: BroadSoft?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, telecommunications software specialist BroadSoft (Nasdaq: BSFT ) has received the dreaded one-star ranking.

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

BroadSoft facts

Headquarters (founded)	Gaithersburg, Md. (1998)
Market Cap	$1.1 billion
Industry	Application software
Trailing-12-Month Revenue	$155.1 million
Management	Co-founder/CEO Michael Tessler Co-founder/Chief Technology Officer Scott Hoffpauir
Trailing-12-Month Return on Equity	13.0%
Cash/Debt	$173.8 million / $85.0 million
Competitors	Alcatel-Lucent Cisco Systems Sonus Networks

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

On CAPS, 71% of the 134 members who have rated BroadSoft believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star TSIF, tapped the stock's recent surge as particularly unsustainable:

Short term downthumb for a retrace after a 27% spike after earnings. Partially fueled by 40% short interest and decent sized institutional holdings. 20% swings have been a frequent norm for BroadSoft as it has become a traders/institutional toy with good news/bad news cycles. 7.3 P/B 6.8 P/S with erratic earnings and forecasts. Could go up further on a one-two punch, but playing for a share price decay and a close.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Cisco. 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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