Why Carbonite Is Poised to Pull Back

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 (NASDAQ: CARB  ) has received the dreaded one-star ranking.

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

Carbonite facts

Headquarters (founded)

Boston (2005)

Market Cap

$259.4 million

Industry

Internet software and services

Trailing-12-Month Revenue

$77.7 million

Management

Co-Founder/Chairman/CEO David Friend
CFO Andrew Keenan

Trailing-12-Month Return on Capital

(56.4%)

Cash / Debt

$66.3 million / $0

Competitors

Acronis
NovaStar
Symantec (NASDAQ: SYMC  )

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

On CAPS, 66% of the 50 members who have rated Carbonite believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star BlacknGold, succinctly summed up the bear case for our community:

Carbonite is worth $15 million on paper and $250+ million on the market. Talk about overvalued. There is no moat in data backup technology. Why would people pay to have a company back up their files when they can keep all of their information secure and private by buying an external hard drive?

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Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 20, 2012, at 9:29 PM, CherryMt wrote:

    Mr All-Star BlacknGold, succinctly summed up the bear case incorrectly, making an error.

    Backing up your files in an external hard drive is useless when your computer, desk, house etc. gets burned down, flooded or destroyed by an unforeseen natural disaster (see hurricane Sandy).

    As for "secure and private" if you do any banking or credit card transaction over the internet you are relying on encryption of sensitive information - probably not as good as used by Carbonite.

  • Report this Comment On December 24, 2012, at 4:52 PM, sjchiggins wrote:

    I am a Carbonite user, and have worked in the computer industry for over 20 years. I have a box with several backup harddrive systems, each more complex than the next. I don't have time to keep learning new harddrive backup software. Carbonite does it all - its on the cloud, secure, and provides these little colored icons on my files and folders that tell me what is backed up. If it makes my life simpler, it's a good thing.

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