Earnings Review; Keep Zagg on your Small-cap Radar
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    Hot Stock Alert – Will ZAGG’s 73% Spurt last Month resume after Nov. 10 Earnings Release?

    ZAGG Inc. (NASDAQ: ZAGG) soared 73% in October and traded at $7.84 on November 3, on solid revenue growth and upward revision of management’s outlook. The company expects third quarter 2010 revenues to exceed $22 million, and guides for full year 2010 revenue growth of 70%. This compares to previously issued revenue guidance of 30% growth over 2009 results. ZAGG’s revenue stood at $38.4 million in 2009.

    ZAGG is a market leader in providing innovative consumer products like films, skins, audio and power solutions that protect, personalize and enhance the mobile experience. ZAGG’s products are distributed worldwide with popular, award-winning brands such as the invisibleSHIELD(TM), ZAGGskins(TM), ZAGGsparq(TM), ZAGGbuds(TM) and ZAGG LEATHERskins(TM). The patent-pending invisibleSHIELD, ZAGG’s flagship product, is the original thin film full-body protector, and is available in more than 5,000 precision pre-cut designs with a lifetime replacement warranty.

    ZAGG’s revenue for second quarter 2010 increased 64% to $15.1 million, versus $9.2 million for Q2 2009. Net income for second quarter 2010 was $1.9 million, or $0.08 per share, as compared to net income of $1.2 million, or $0.05 per share, for second quarter 2009, and $0.8 million or $0.03 per share for first quarter 2010. The company is primarily capitalizing on growing popularity of Apple Inc. (NASDAQ: AAPL) iPod, iPhone and iPad products.

    During 2010, ZAGG benefited from new distribution channels, the introduction of popular new devices such as the iPad and iPhone 4 from Apple, as well as other new mobile device introductions and continued strength in Internet channels. ZAGG products are available online at ZAGG.com and in major retailers around the globe, including Best Buy, Target, RadioShack, Carphone Warehouse and hundreds of other retailers. The company’s newest channel partner, AT&T, reported robust response to ZAGG’s products in its  stores, and could be responsible for a significant part of the company’s projected growth.

    The growing popularity of Apple gadgets will continue to be the company’s biggest growth driver over the next years. In addition, the advertising campaign positioning ZAGG’s cases as a cure for the antenna interference issue could make the company’s revenue and valuation to go even higher going forward. The upcoming release of third quarter 2010 results on November 10, would be indicative of the revenue momentum magnitude.

    ZAGG is currently expected to report revenue in the range of $65 million for 2010 and $80 million for 2011. The company’s EPS is expected to range around $0.34 in 2010 and $0.41 in 2011.

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