Why Advisory Board 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, business research provider Advisory Board (NASDAQ: ABCO  ) has received the dreaded one-star ranking.

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

Advisory Board facts

Headquarters (Founded)

Washington, D.C. (1979)

Market Cap

$1.8 billion

Industry

Research services

Trailing-12-Month Revenue

$413.8 million

Management

CEO Robert Musslewhite (since 2008)
CFO Michael Kirshbaum (since 2006)

Return on Equity (Average, Past 3 YTears)

13.2%

Cash/Debt

$95.2 million / $0

Competitors

Accenture
Huron Consulting
Navigant Consulting

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

On CAPS, 76% of the 74 members who have rated Advisory Board believe the stock will underperform the S&P 500 going forward.

Earlier this month, one of those Fools, All-Star MMCapitalMgmt, wrote that the Advisory Board bear case all boiled down to price:

Ridiculously overvalued. Trading at 25x EV/EBITDA, 4x EV/Rev, 7x book value, 4x sales, 64x trailing earnings, 33x forward earnings. Come on now, this isn't a premium company.

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