Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, weight loss specialist NutriSystem (NASDAQ:NTRI) has received a distressing two-star ranking.

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

NutriSystem facts

Headquarters (Founded)

Horsham, Penn. (1972)

Market Cap

$964.7 million


Internet retail

Trailing-12-Month Revenue

$536.1 million


CEO Joseph Redling (since 2008)
CFO David Clark (since 2007)

Revenue and Net Income Growth (Over Past Year)

(24.5%) and (62.1%)

1-Year Return



Weight Watchers
GlaxoSmithKline (NYSE:GSK)

CAPS Members Bearish on NTRI Also Bearish on


CAPS Members Bullish on NTRI Also Bullish on


Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 11% of the 935 members who have rated NutriSystem believe the stock will underperform the S&P 500 going forward. These bears include dantheinvestor and the top-ranked member in all of CAPS, UltraLong.

Just last month, dantheinvestor questioned NutriSystem's growing presence at the big brick-and-mortars: "Retail will add more [operating expense], less recurring revenue, and lower margins. [Wal-Mart Stores (NYSE:WMT)] may be OK, but they aren't hooking new customers into recurring shipments and auto billing, which will stifle {NutriSystem’s] growth and earnings."

In a pitch from two days earlier, UltraLong also thought the stock was ready to drop a few pounds:

Everyone is jumping on the diabetic diet bandwagon and hooking up with Wal-Mart and [Walgreen (NYSE:WAG)]. Me? I'm jumping on the can't maintain a customer longer than 10 weeks bandwagon which shows a futuristic mass exodus from NutriSystem.

Look, I don't exactly deny the fact that [NutriSystem] has a fantastic balance sheet with no debt ... but they are already trading at a futuristic P/E of 20 times 2010 given double digit negative revenue growth in 2009 and high single digit revenue growth in 2010. PEG ratios above 2 in this case considering their weak customer retention history is a dooming factor.

What do you think about NutriSystem, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Apple is a Motley Fool Stock Advisor pick. Wal-Mart Stores is a Motley Fool Inside Value pick. The Fool has a financial position in GlaxoSmithKline. The Fool's disclosure policy always gets a perfect score.