Financial Success

ZAGG has grown rapidly and shown strong financial results.  Net sales for the second quarter of 2008 were $2,739,176, an increase of 240.5% compared to net sales of $804,458 for the second quarter of 2007. Net sales for the six months ended June 30, 2008 were $5,584,597, an increase of 249.6% compared to net sales of $1,597,306 for the six months ended June 30, 2007.  This is a fast-growing company that is simultaneously building significant revenues.  RedChip’s target price for the stock is $2.25 per share; with ZAGG currently trading at $0.78, right now is a key time to invest in the company at an undervalued price.

About the Product

ZAGG’s invisibleSHIELD is the leader in the device protection market due to an exceptionally clear and virtually indestructible film that will protect devices from scratches and further damage. The exclusive, patented film – with nano-memory technology – covers and shields devices better than any other product on the market.

The precision pre-cut invisibleSHIELD applies directly to the device, providing durable protection. The invisibleSHIELD has its origins in the military, where it was used to protect high-speed helicopter blades from dust, dirt and debris. ZAGG has brought this advanced technology to the consumer marketplace.  The invisibleSHIELD is only .2 millimeters thick making it the slimmest protective cover of its kind.

Portable devices such as laptops and smartphones are expensive machines that the world has come to rely upon.  With that in mind, the company that creates a simple and efficient method of protecting them would be in a position for expansive growth and market share dominance. ZAGG is a company that is doing exactly that. ZAGG (OTCBB: ZAGG), click here for investor profile,  has become the leading provider of protective film coverings for personal electronics.  The company recently announced that it is now shipping the invisibleSHIELD for the new T-Mobile G1, the first phone to run on Google’s Android operating system.  They are also introducing the invisibleSHIELD for the new MacBook 13” and MacBook Pro 15” models.

ZAGG has tremendous upside potential and has a stronghold on the portable device market. RedChip Research currently has a target price of $2.25 for ZAGG and states that the company is presently undervalued, trading at around $0.84 per share. 

The Technology

The invisibleSHIELD is made from a patented adhesive film exclusive to ZAGG for the purpose of protecting high-performance mobile electronics such as laptops, mobile phones, PDAs and gaming devices. ZAGG’s invisibleSHIELD, the thinnest protective skin of its kind, protects the new MacBook and MacBook Pro from wear and tear without altering the innovative design.

The ultra-tough material used to create the invisibleSHIELD was originally utilized by the U.S. military to protect helicopter blades from wind, sand and the wear and tear of high-speed travel. Combining this military-grade scratch protection with precision-cut designs, the invisibleSHIELD, backed by a lifetime guarantee, allows customers to use their electronics without the fear of scratches or nicks.

Talking about the MacBook:

“Apple’s new MacBook models incorporate some of the most impressive, forward-thinking aesthetics in the industry,” said Robert G. Pedersen II, President and CEO of ZAGG. “As the toughest transparent skin on the market, the invisibleSHIELD keeps them looking new for life without covering up the attractive aluminum casing.”

Talking about Google and T-Mobile‘s G1:

“The complex shape and design of the G1 necessitates a specific kind of protection,” said Robert G. Pedersen II, President and CEO of ZAGG. “The invisibleSHIELD is custom-designed to protect the full body of the G1 without interfering with functionality or touch screen sensitivity. The G1 is a significant advancement in smartphone technology, and it deserves the most advanced protection. Unlike bulky cases that offer inadequate protection, the invisibleSHIELD is the most durable way to scratch-proof any device, while preserving the original, sleek design.”

To learn more about ZAGG and other exciting small cap investment opportunities, please visit www.RedChip.com.

We have recently issued a second quarter 2008 research update for ZAGG, Inc. (OTCBB:ZAGG, click here for the company profile).

ZAGG Inc. designs, manufactures, and distributes protective coverings for consumer electronic and hand-held devices under the brand name invisibleSHIELD™ worldwide. The invisibleSHIELD is a protective, high-tech film covering, designed for iPods, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices, and other items. The patent-pending invisibleSHIELD is the first scratch protection solution of its kind on the market. Currently, ZAGG offers over 2,000 precision pre-cut designs with a lifetime replacement warranty through online channels, resellers, college bookstores, Mac stores, and mall kiosks. The company plans to increase its product lines to offer electronic accessories to its tech-savvy customer base, as well as an expanded array of invisibleSHIELD products for other industries.

Ekta Bhatia, MBS, one of our RedChip Research Analyst, reported in the research update:

“Ahead of expectations, ZAGG demonstrated profitability in 2Q08 which we believed, comparatively, to be a sluggish quarter. The Company maintained its revenue drift, accomplishing 240% year-over-year revenue growth in the second quarter, and we expect firm growth going forward as the third and fourth quarters are usually fundamentally strong.”

“ZAGG is aggressively pursuing alliances with big box retailers, and we believe these alliances will be catalysts to the Company’s successful penetration in the market. Although ZAGG has competition, its first-mover advantage and reliable business association both at the back and front ends will give it an edge over the next two to three years,” she continued.

“We believe ZAGG’s evolution as an exclusive distributor of protective electronic coverings has been very impressive, and it offers a conservative investment opportunity in a specialty retail segment. We maintain our ‘Speculative Buy’ rating and have revised upward our 12-month target price to $2.25 to encapsulate the recent revenue and business gains amidst a difficult economic environment,” Bhatia concluded.

To receive a complimentary copy of the RedChip Visibility Research Report for ZAGG, please click here.

See below for a RedChip interview with ZAGG: