Saturday, January 15, 2011

Zagg ( Nasdaq - ZAGG ) -- Penetrates Verizon Retail Stores

Zagg (ZAGG $9.75) will start selling its Invisible Shield products through Verizon's retail stores.  Last year the company signed up ATT as a retail partner.  Best Buy remains Zagg's largest distribution channel.  The launch will be coordinated with Verizon's introduction of the Apple iPhone in February.  Protective coverings for the iPhone probably will account for most of the incremental revenue boost, although the company could benefit from Blackberry and Android business, as well.  Results also promise to respond from Zagg's new Irish distribution center in 2011.  Europe presently accounts for 10%-15% of sales but customer acceptance of the Invisible Shield is high, and volume could respond to more aggressive marketing efforts.  U.S. results could gain an additional lift if Radio Shack, which hasn't done much to date, adjusts its marketing efforts to reflect Best Buy's approach. 

We are raising our 2011 earnings estimate by a dime to $.60 a share.  We also are lifting our sales estimate by $5 million to $90 million.  Growth is likely to be sustained at above average rates for at least several more years as the mobile device market keeps expanding.  Zagg hopes to leverage that success by launching additional products that capitalize on its brand name and distribution network.

( Click on Table to Enlarge. )

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