Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, book retailer Barnes & Noble (NYSE: BKS) has received the dreaded one-star ranking.

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

Barnes & Noble facts

Headquarters (Founded) New York (1986)
Market Cap $845 million
Industry Specialty stores
Trailing-12-Month Revenue $7.01 billion
Management Founder/Chairman Leonard Riggio
CEO William Lynch
Trailing-12-Month Return on Equity (7%)
Cash/Debt $23.6 million / $274.9 million
Competitors (Nasdaq: AMZN)
Costco (Nasdaq: COST)
Wal-Mart (NYSE: WMT)

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

On CAPS, 48% of the 560 members who have rated Barnes & Noble believe the stock will underperform the S&P 500 going forward. These bears include Thentor and jimpickrell2.

Just last month, Thentor showed skepticism over the company's online endeavors: "[Barnes & Noble] is stuck in the stone age when it comes to inventory mechanics. I can't see how they'll compete with agile [Amazon], even with Nooks."

Barnes & Noble even sports a negative average two-year return on equity of -5.1%. Meanwhile, rivals Amazon, Costco, and Wal-Mart boast positive average returns on equity of 17.4%, 12.9%, and 23%, respectively.

CAPS member jimpickrell2 elaborates on the bear case:

[Barnes & Noble] is up against the wall. Their brick and mortar business is getting crushed by Amazon. The writing is on the wall, and they've decided to pin their hopes on their online business. ... Amazon is better at it than they are. And even if the online business were to succeed, the rent on those stores will drag them down. ... They may hold out for a while, but will go the way of Tower Records, Borders and other retailers that have been obsoleted by the digital age. Too bad because I like bookstores.

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