Roth Capital Reiterates Neutral Stance On Zagg Following Q214 Results As Concerns Still Surrounding
Yesterday, Roth Capital analyst Dave King issued a note in which he reiterated a Neutral rating on Zagg Inc. (ZAGG) with a $5.50 price target, following the release of the company’s second-quarter earnings, which exceeded expectations on stabilizing revenue.
King noted, “ZAGG reported 2Q14 EPS of $0.03, above our $0.01 estimate and the Street consensus of $0.02, as stronger-than-expected revenue more than offset gross margin pressures from beyond just a weaker product mix. Revenue fell 2% YOY to $50.2M, but came in above our $42.0M estimate and consensus of $43.2M, due to strong growth in keyboards, traction with the company’s recently-introduced invisibileSHIELD Glass, and growth in power products. Sales of the company’s invisibleSHIELD product fell 7% YOY to 36%/sales, while keyboard revenues grew 30% to 34%/sales”.
King wrote, “We still believe ZAGG is setting up for a better 2H14, but implied guidance for 2%-10% growth suggests continued keyboard traction amidst a slowdown in tablet sales. Our Neutral reflects concerns surrounding ZAGG’s device launch-dependence and the viability of certain product categories, though others are gaining traction”.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Dave King has a total average return of 3.2% and a 39.1% success rate. King is ranked #1512 out of 3206 analysts.
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