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Bull of the Day: Zagg Inc. (ZAGG)

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Headquartered in Midvale, UT, Zagg Inc. (ZAGG - Free Report) designs and manufactures protective clear coverings and accessories for consumer electronics and hand-held devices under its flagship brand, invisibleSHIELD.

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. It’s the first scratch protection solution of its kind on the market and has sold over one million units.

The company continues to increase its product lines to offer additional electronic accessories to its tech-savvy customer base, as well as an expanded array of invisibleSHIELD products for other industries.

Shares Soar on Strong Q1 Earnings

Last month, the Zacks Rank #1 (Strong Buy) Zagg reported impressive Q1 numbers across the board. Shares soared almost 28% as a result, suggesting analysts were very much impressed by the electronic company’s performance.

Both its top and bottom line easily beat the Zacks Consensus estimate, with earnings of 24 cents per share coming in well above our estimate of a loss of a penny per share.

Revenues grew 21% year-over-year thanks to an increase in sales of its power management products and accessories supporting wireless charging, as well as sales growth in its screen protection products.

Gross profit came to 34% of net sales, while adjusted EBITDA was $13.6 million, both metrics improving from Q1 2017.

Zagg reiterated its 2018 guidance, and expects revenues in the range of $550 million to $570 million, with earnings of $1.30 and $1.50 per share.

Strong Earnings Outlook

For ZAGG, its bottom line is trending upward for the foreseeable future.

Current fiscal year figures are looking pretty great, with four upwards estimates in the last 60 days. The Zacks Consensus estimate trend has jumped nine cents from $1.31 per share to $1.40 per share.

Next year is looking good as well, with earnings expected to grow about 6.8%; the consensus has increased 18 cents in the past two months.

ZAGG has an average earnings surprise of over 630%.

ZAGG: What’s Next for the Stock?

Shares of Zagg have gained over 100% in the past one-year period. In comparison, the S&P 500 has gained 11.6% in the same time period.

ZAGG Inc Price and Consensus

ZAGG Inc Price and Consensus | ZAGG Inc Quote

ZAGG is currently trading at a forward P/E of 13X.

Its industry, Electronics-Miscellaneous Components, has lost about 3.7% year-to-date, but the group sits in the top 27% of all industries ranked by the Zacks Industry Rank. ZAGG, though, is one of the top performers, especially when compared to industry peers like Universal Display Corp. (OLED - Free Report) and Rogers Corp. (ROG - Free Report) .

Taking into account its impressive industry standing, as well as its expected earnings growth, Zagg Inc. could be an exciting opportunity for investors looking to get in to the broad electronics space right now.

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