Why Lifelock (LOCK) Stock Is Down Thursday

NEW YORK (TheStreet) -- Shares of Lifelock Inc. (LOCK) are down -5.29% to $14.87 on Thursday after the identity theft protection company released its 2014 first quarter financial results.

The company reported its net income loss was -$5.2 million, or -6 cents per diluted share, versus a net loss of -$4.1 million, or -5 cents per diluted share, from the 2013 first quarter.

Lifelock's adjusted EBITDA was $0.7 million for the 2014 first quarter, compared to $1.9 million from the year ago quarter.

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Total revenue for the company increased 31% to $107.6 million from $82.1 million for the 2013 first quarter.

TheStreet Ratings team rates LIFELOCK INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIFELOCK INC (LOCK) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to other companies in the Diversified Consumer Services industry and the overall market, LIFELOCK INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 29.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • LOCK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Consumer Services industry. The net income increased by 1204.1% when compared to the same quarter one year prior, rising from $4.08 million to $53.21 million.
  • LIFELOCK INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, LIFELOCK INC increased its bottom line by earning $0.53 versus $0.15 in the prior year. For the next year, the market is expecting a contraction of 15.1% in earnings ($0.45 versus $0.53).
  • You can view the full analysis from the report here: LOCK Ratings Report
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