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Ian Cassel
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Full Time Micro Cap Investor. Founder of MicroCapClub.com The MicroCapClub (mc2) is an exclusive micro cap forum focused on micro cap companies (sub $300m market cap). The MicroCapClub was created and founded by Ian Cassel as a way to share ideas and to learn from other seasoned like-minded... More
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  • ZAGG Inc. (ZAGG) Misses Analyst Estimates, but Reaffirms Guidance 0 comments
    May 10, 2010 10:01 PM | about stocks: ZAGG, AAPL, BBY, RSH, DTEGY, SPLS

    l'll be honest, when I first saw ZAGG’s Q1 results I wanted to sell the rest of my stock, but I was glad I listened to the conference call.  ZAGG posted  Q2 results after the close today of $8.8 million in revenues and 0.03 EPS (analyst consensus $10.6m Revenues 0.04 EPS). 

    • ZAGG reaffirmed guidance of 30% revenue growth and 19-21% operating margins for 2010
    • Q2 will be positively impacted by the Apple (NASDAQ:AAPL)  iPad launch.  Zagg.com saw dramatic increases in traffic ie web sales of the iPad invisible shield.
    • Q2 will be postively impacted by the rollout of invisible shield to all 1550 Staples (NASDAQ:SPLS) Stores.
    • RadioShak (NYSE:RSH) is doubling their SKU count (from 3 to 6) in 4000 corporate stores.  I believe this is happening in Q2.
    • Previously announced Best Buy (NYSE:BBY) Mexico and Fry’s shipped in Q2.
    • ZAGGbuds and ZAGGsparq going to be sold by a major retailer this summer. This is a big deal since the probable MSRP on these two products are 2-4x that of the invisible shield.  This could increase revenues/profits dramatically with proper sell through.
    • ZAGG entering T-Mobile (DT)  in Hungary (150 stores)
    • Opened first international ZAGG Kiosks in three countries.
    • ZAGG expects to be in major wireless stores by YE 2010.
    • A couple analysts really pushed the management to further explain how they expect to grow 30% this year after only growing 8% in Q1.  Management answered by saying they usually only disclose publicly new wholesale channel wins once they ship, but they feel confident in guidance given the backlog they see.
    Most of the participants on the call seemed fairly pleased with the prospects for the future.  I was one of them.   I first thought the stock was heading right to $2.00, but after hearing the CC I believe the stock may drift 10-15% lower and churn as institutions add to their positions.

    Disclosure: LONG ZAGG
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