Zagg (Nasdaq: ZAGG) can't seem to catch a break.

The maker of protective products for Apple (Nasdaq: AAPL) gadgetry has shed more than 25% of its value since Steve Jobs introduced the slick Smart Cover for the iPad 2.

Zagg was starting to claw its way back, but the stock has been sucked back down given the global market malaise and the uninspiring investor reaction to this week's quarterly results.

It's a pity, because the report was pretty darn impressive. Revenue soared 157% to $29.3 million. Earnings grew even faster, clocking in at $0.13 a share after checking in at just $0.01 a share during the previous year's holiday quarter. During the call, the company conceded that it would have earned closer to $0.20 a share if not for some inventory adjustments on products for non-Apple devices that didn't pan out. ZAGG didn't name names, but it does sell protective gear for smartphones by Research In Motion (Nasdaq: RIMM), Motorola Mobility (NYSE: MMI), Samsung, HTC, and Hewlett-Packard's (NYSE: HPQ) Palm.

Zagg's invisibleSHIELD offers clear and scratch-proof covers for smartphones, tablets, and iPod touch media players. Mobile sales (mainly for smartphones) account for a little more than 90% of its sales. Tablet products make up just 7% of the revenue mix, though that may change given the recent success of ZAGGmate.

Introduced in late November, ZAGGmate is an airplane-grade aluminum iPad cover that comes with an optional Bluetooth keyboard. The $69 accessory -- $99 with the keyboard -- was recently featured by MC Hammer on Oprah Winfrey's show and won a "Best of Show" award at this year's Macworld. An updated ZAGGmate for the iPad 2 hits the market this year.

Despite its e-commerce initiatives and mall-based kiosks, 73% of last year's sales -- and 78% of the holiday quarter's sales -- came from its non-direct wholesale business. In other words, it's still at the mercy of third-party distributors.

The real question here is whether Apple is also at the mercy of third-party players. The Smart Covers with their magnetic clasps, stylish varieties, and multi-functional features would seem to be the Cupertino giant's way of thumbing its nose at the companies riding its coattails.

Zagg still sees its relevancy growing. The Smart Cover provides the same amount of protection the ZAGGmate does. The Smart Cover also leaves the screen exposed when in use. The invisibleSHIELD does not.

Zagg sees revenue of $95 million to $100 million in 2011, implying an impressive growth rate of 25% to 31% this year. Gross margins will continue to slip given the product mix. Zagg's gross margins slipped from 58% in 2009 to 49% last year. It's targeting gross margins in the mid-40% range for 2011. However, it's making it up in volume with operating margins holding up reasonably well.

The shares are now trading at 15 times this year's projected profitability and a mere 12 times what analysts believe Zagg will earn next year. That's too cheap for a company that is still growing considerably faster. Apple will never stretch itself too far from its comfort zone to rub out all of Zagg's products. Even under the unlikely case that it does expand its wingspan, there will be plenty of smaller smartphone and tablet gadgets for Zagg to protect.

The market is overreacting here. Patient shareholders may as well invest in an invisibleSHIELD for their stock certificates and wait it out. The market's zigging now, but it will likely Zagg later.

Is Zagg a good buy or a loser? Share your thoughts in the comment box below.

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Longtime Fool contributor Rick Munarriz is starting to see more Apple products creep into his home lately. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.