Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, handheld device accessory specialist ZAGG
With that in mind, let's take a closer look at ZAGG's business and see what CAPS investors are saying about the stock right now.
ZAGG facts
| Headquarters | Salt Lake City, Utah |
| Market Cap | $296.6 million |
| Industry | Specialty retail |
| Trailing-12-Month Revenue | $94.34 million |
| Management |
Chairman/CEO Robert Pedersen, II CFO Brandon O'Brien |
| Return on Equity (Average, Past 3 Years) | 45.8% |
| Cash/Debt | $1.8 million / $4.2 million |
| 1-Year Return | 405% |
| Competitors |
Apple |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 24% of the 228 members who have rated ZAGG believe the stock will underperform the S&P 500 going forward. These bears include All-Stars Rich Duprey (TMFCop) and metoo105, both of whom are ranked in the top 10% of our community.
Just last week, Rich brought a few red flags to our community's attention: "Inventories are rising faster than sales and finished goods are growing nearly five times faster than sales. Seems like a warning sign that sales growth may sputter."
In fact, ZAGG currently sports a forward P/E of 17. That represents a premium to Apple (11), whose SmartCover now competes directly with ZAGG, as well as Motorola Mobility
CAPS All-Star metoo105 elaborates on the ZAGG bear case:
Ask yourself, why is 50% of this stock's float sold short?
My guess is that pretty much everyone who has piled on short here is simply thinking about Porter's five factors and how there just aren't any moats to this business. The 50% gross margin is unbelievably high. It's even higher than Apple's 40% and Apple has monopolistic pricing (from its IP).
Competitors will finally commoditize Zagg's products. Consumers will win; Zagg will lose.
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