Why LifeLock Is Poised to Keep Plunging

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 (NYSE: LOCK  ) 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.

LifeLock facts

Headquarters (founded)

Tempe, Ariz. (2005)

Market Cap

$801.0 million

Industry

Application software

Trailing-12-Month Revenue

$276.4 million

Management

Co-Founder/Chairman/CEO Richard Davis

CFO Chris Power

Trailing-12-Month Return on Equity

27.8%

Cash/Debt

$134.2 million / $0

Competitors

Equifax

Intersections

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.

Just yesterday, one of those Fools, SaiyanBroker, succinctly summed up the LifeLock bear case for our community:

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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