Intersections Is No LifeLock

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Given Target's embarrassing holiday hack, one would think that this would be a great time to be toiling away in identity theft and risk management solutions. However, that's clearly not the case if we go by last night's quarterly report out of Intersections (NASDAQ: INTX  ) .

Intersections continues to suffer from defecting subscribers. Revenue slipped 14%, to $72.1 million for the quarter -- and off 11%, to $310.3 million for all of 2013 -- as financial institutions continue to bow out. Total subscribers have plummeted, going from 4.5 million when the year began to just 2.9 million by the end of December. 

If the slide at Intersections seems to be a sharp contrast to LifeLock (NYSE: LOCK  ) experiencing 35 consecutive quarters of sequential increases in revenue and subscribers, one big difference is that LifeLock is largely a consumer-facing monitoring service. Intersections relies primarily on U.S. banks and other financial institutions to push its identity-theft platform as an add-on product. Given the broader regulatory scrutiny in the banking industry, many financial institutional clients of Intersections have stopped marketing its products.

Intersections points out that business is growing slightly in Canada, and also with its consumer-direct offering, but this accounts for just a quarter of its revenue at the moment. It may take a long time before that starts to move the needle.

Target's situation, with millions of shopper credit and debit card information getting swiped, was unfortunate, and it's not getting any prettierLast week, the cheap-chic discounter admitted that its security system tipped it off to suspicious activity well before the company acted on it and disseminated the warning. This is the kind of stuff that should send consumers scrambling for monitoring services for early detection of any potential breaches. Financial institutions should be able to sell Intersections' platform with ease. However, it's just not playing out that way.

LifeLock's doing just fine. Revenue climbed 30% in its latest quarter, with adjusted earnings more than doubling. Intersections and LifeLock are passing ships, with one company's rolls falling below 3 million subscribers as the other just crossed it late last year.

Intersections doesn't expect things to get better anytime soon. It's forecasting revenue to fall 11% to 18% this year. Its guidance calling for $300 million in revenue next year is a bounce, but still below what it rang up in each of the past few years. It's pointing to $400 million as a target for 2016 once it gains more traction for its Identity Guard and VOYCE brands. However, if you're going to be bold enough to believe an outlook that is three years out coming from a fading company in a niche that's coming under regulatory scrutiny, you're more of a risk taker than someone letting an Intersections subscription lapse.

LifeLock isn't cheap using conventional measuring sticks, especially when pitted against Intersections. However, it's the one that's growing in this seemingly ideal climate.

Banks may be turning their backs on Intersections, but they have a $20.8 trillion secret to share
Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.

Read/Post Comments (0) | Recommend This Article (0)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2881569, ~/Articles/ArticleHandler.aspx, 8/30/2015 4:00:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
INTX $2.03 Up +0.10 +5.18%
Intersections, Inc… CAPS Rating: ***
LOCK $8.39 Up +0.18 +2.19%
LifeLock CAPS Rating: **
TGT $78.03 Up +0.18 +0.23%
Target CAPS Rating: ****