ZAGG (NASDAQ: ZAGG) and Skullcandy (NASDAQ:SKUL) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitabiliy, valuation, dividends and institutional ownership.

Valuation & Earnings

This table compares ZAGG and Skullcandy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ZAGG $432.37 million 0.55 $27.97 million ($0.66) -12.88
Skullcandy N/A N/A N/A $0.07 90.58

ZAGG has higher revenue and earnings than Skullcandy. ZAGG is trading at a lower price-to-earnings ratio than Skullcandy, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

78.8% of ZAGG shares are owned by institutional investors. Comparatively, 46.7% of Skullcandy shares are owned by institutional investors. 3.5% of ZAGG shares are owned by insiders. Comparatively, 7.7% of Skullcandy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for ZAGG and Skullcandy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ZAGG 0 1 1 0 2.50
Skullcandy 0 1 0 0 2.00

ZAGG currently has a consensus price target of $9.50, suggesting a potential upside of 11.76%. Skullcandy has a consensus price target of $6.35, suggesting a potential upside of 0.16%. Given ZAGG’s stronger consensus rating and higher probable upside, analysts clearly believe ZAGG is more favorable than Skullcandy.

Volatility and Risk

ZAGG has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Skullcandy has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Profitability

This table compares ZAGG and Skullcandy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ZAGG -4.26% 4.81% 1.91%
Skullcandy -2.75% -4.04% -3.32%

Summary

ZAGG beats Skullcandy on 7 of the 11 factors compared between the two stocks.

ZAGG Company Profile

ZAGG Inc (ZAGG) designs, produces and distributes professional product solutions for mobile devices, including screen protection (glass and film), keyboards for tablet computers and mobile devices, keyboard cases, earbuds, mobile power solutions, cables, and cases under the ZAGG and InvisibleShield brands. In addition, the Company designs, produces and distributes earbuds, headphones, mobile power solutions, Bluetooth speakers, cases and cables for mobile devices under the iFrogz brand in the fashion and youth oriented lifestyle sector. The Company designs product solutions for users of mobile devices, and sells these products to consumers through global distribution partners and online. The Company offers products for various market segments of handheld electronic devices, including smartphones, tablets, notebook computers, laptops, gaming devices, global positioning system (GPS) devices, watch faces, and similar devices and surfaces.

Skullcandy Company Profile

Skullcandy, Inc. creates audio experiences through its Skullcandy and Astro Gaming brands. The Company operates in two segments: Domestic and International. The Domestic segment consists of Skullcandy and Astro Gaming product sales to customers in the United States. The International segment includes Skullcandy product sales to customers in Europe, Asia, Canada Mexico, and all other geographic areas outside the United States that are served by the Company’s International operations. The Company focuses its product offerings in two categories: audio and gaming. The Company primarily operates in the consumer products category in which the Company develops and distributes headphones and other audio products. Astro Gaming creates premium video gaming equipment for professional gamers, leagues, and gaming enthusiasts. Skullcandy brand creates various audio and gaming products.

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