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

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

Earnings & Valuation

This table compares ZAGG and Skullcandy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ZAGG $432.37 million 0.57 $27.97 million ($0.66) -13.41
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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for ZAGG and Skullcandy, as provided by MarketBeat.com.

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 presently has a consensus target price of $9.50, indicating a potential upside of 7.34%. Skullcandy has a consensus target price of $6.35, indicating a potential upside of 0.16%. Given ZAGG’s stronger consensus rating and higher possible upside, research analysts plainly believe ZAGG is more favorable than Skullcandy.

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%

Risk & Volatility

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

Summary

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

About ZAGG

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.

About Skullcandy

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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