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Why WebMD Is Poised to Pull Back

By Brian D. Pacampara, CFA - Apr 9, 2013 at 11:07AM

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Market-lagging returns could be written in this 1-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, health-care website operator WebMD Health (WBMD) has received a dreaded one-star ranking.

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

WebMD facts

Headquarters

New York

Market Cap

$1.2 billion

Industry

Internet software and services

Trailing-12-Month Revenue

$469.9 million

Management

CEO Cavan Redmond (since 2012)

CFO Anthony Vuolo (since 2009)

Return on Equity (average, past 3 years)

4.3%

Cash/Debt

$991.8 million / $800.0 million

Competitors

iVillage

Mayo Clinic

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

On CAPS, 34% of the 174 members who have rated WebMD believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, Motley Fool Co-Founder David Gardner (TMFSpiffyPop), succinctly summed up the underperform case for our community:

A Faker Breaker that relies upon, rather than drives, its industry's growth. Ad business, with all attendant weaknesses (including required NYC positioning, and ad culture as opposed to purpose-driven culture). Tried to sell itself in 2011, unsuccessfully. Hated on Glassdoor. Recent run-up is likely an opportunity to sell. Underperform.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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Stocks Mentioned

WebMD Health Corp. Stock Quote
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WBMD

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