Why Ellie Mae Is Poised to Pop

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mortgage industry software specialist Ellie Mae (NYSE: ELLI  ) has earned a coveted five-star ranking.

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

Ellie Mae facts

Headquarters (founded)

Pleasanton, Calif. (1997)

Market Cap

$604.2 million

Industry

Application software

Trailing-12-Month Revenue

$101.9 million

Management

Co-Founder/Chairman/CEO Sigmund Anderman

President/COO Jonathan Corr

Return on Equity (average, past 3 years)

7.7%

Cash/Debt

$60.4 million / $0

Competitors

Fiserv

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

On CAPS, 99% of the 151 members who have rated Ellie Mae believe the stock will outperform the S&P 500 going forward.

Earlier today, one of those Fools, TMFInnovator, succinctly summed up the Ellie Mae bull case for our community:

- Rapidly growing user base (+40% yr/yr) that is adopting the Encompass software solution.
-As users become more comfortable/familiar with Encompass, switching costs rise and # of transactions/user increases (revenues to ELLI).
-Asset-light business model that is easily scalable.
-Huge addressable market that is in flux due to increased regulations. Increased regulation is good for ELLI business.
-Network Effect: The Ellie Mae Network becomes more valuable as more users subscribe.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, Ellie Mae may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

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