Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, consulting and managed services provider eLoyalty
With that in mind, let's take a closer look at eLoyalty's business, and see what CAPS investors are saying about the stock right now.
eLoyalty facts
Headquarters (founded) |
Lake Forest, Ill. (1994) |
Market cap |
$117.1 million |
Industry |
IT consulting and other services |
TTM revenue |
$99.1 million |
Management |
President/CEO Kelly Conway (since May 1999) |
Year-to-date return |
219% |
Return on capital (average, last three years) |
(33.5%) |
Highly rated consulting stock alternatives |
Accenture |
CAPS members bearish on ELOY also bearish on |
Palm |
CAPS members bullish on ELOY also bullish on |
Valero Energy |
Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 27 of the 46 members who have rated eLoyalty -- some 59% -- believe the stock will underperform the S&P 500 going forward. These bears include All-Stars mrindependent and TSIF, both of whom are ranked in the top 4% of our community.
Late last month, mrindependent raised the red flags on eLoyalty's red results: "This company has lost over $180 million since inception and is set to lose another $12 million or so this year. ... I am shorting this while I can."
In a pitch from three weeks earlier, TSIF stays loyal to that sentiment:
Fundamentally, eLoyalty is a disaster, not just waiting to happen, but long over due for a plunge. With a P/B of 9, negative margins, negative cash flow, sustained losses ... it is surviving by issuing stock, burning off the cash, issuing stock, burning off the cash, etc. While this economy might be good for some consulting companies as companies strive to make the most of their limited resources, eLoyalty couldn't consult their way out of a paper bag, and their potential customers know it.
What do you think about eLoyalty, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.