ZAGG Starting to Get Mojo Back

ZAGG Inc. (ZAGG) is dedicated to protecting and enhancing the mobile experience. ZAGG designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide under the brand names invisibleSHIELD (TM) and ZAGGaudio (TM). The invisibleSHIELD is a protective, high-tech patented film covering, designed for iPods, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices, and other items. The patent-pending invisibleSHIELD application of clear protective film covering a device is the first scratch protection solution of its kind on the market, and has sold millions of units. Currently, ZAGG offers over 4,000 precision pre-cut designs with a lifetime replacement warranty through ZAGG.com, major retailers like Best Buy (BBY), Radio Shack (RSH), and Cricket, resellers, college bookstores, Mac stores, mall kiosks, and other online retailers.

ZAGG was a very hot stock during the first half of 2009 running from $0.60 to $7.00. The company missed analyst expectations two quarters in a row, and the stock traded down to a low of $2.00 in February. ZAGG looks to be righting the ship as it gave a baseline 30% growth estimate for 2010, which implies revenue of $50 million and EPS 0.23-0.26 for FY 2010. The company is currently trading around $3.00 or 15x TTM EPS (backing out non-cash charges in Q4 2009). I believe if the company can string together a couple of quarters that meet the street's expectations the stock will rally back to $5.00+ PPS.

ZAGG is one of the top benefactors of Apple (AAPL), Research In Motion (RIMM), and any other consumer electronic device with a touch screen. The Apple iPad is providing yet another growth driver for ZAGG. The company recently posted on its website:

ZAGG shipped tens of thousands of Apple iPad invisibleSHIELDs across the country prior to the iPad's release. The invisibleSHIELD was available in select national retailers across the country before the iPad itself even hit the shelves.

You can also see the positive correlation between the Apple iPad launch and Zagg.com’s website traffic:

ZAGG also continues to expand its domestic and international big box reach. ZAGG announced after the close that they expanded their domestic and international distribution with the addition of two major retail outlets. ZAGG’s newest distributors include:

• Fry’s Electronics, a big-box retailer of consumer electronics with stores in nine states and headquarters in San Jose, California. Along with the invisibleSHIELD, Fry’s Electronics will also carry many of ZAGG's other award-winning products, including the new ZAGGsparq™, ZAGGbuds™, and ZAGGskins™.

• Best Buy Mexico, a division of Best Buy Co., Inc. Best Buy Mexico will carry the invisibleSHIELD for some of the most popular electronics including the latest versions of the Apple iPhone and iPod touch, and the leading BlackBerry models.

I expect ZAGG will continue to do what it’s doing, expanding and growing. I believe the stock has a good shot at doing the same.

Disclosure: Long ZAGG