The following is an excerpt from todays Seeking Alpha: The company reiterated its 2012 outlook of $280-$300 million in revenues and EPS of $1.10-$1.20."
In terms of sales, Skullcandy has been growing at a tremendous rate, experiencing 60.2% compounded annual growth from 2007-2011, with sales projected to increase from 20.4%-29.0% in 2012. On a year-over-year, quarter-over-quarter, and sequential quarter growth, Skullcandy has performed tremendously:
2012 Q1/Q1 sales growth: 47.93%
2012 Q2/Q2 sales growth: 32.25%
2012 Q3/Q3 sales growth: To be determined
2012 Q4/Q4 sales growth: To be determined
So far, Skullcandy has experienced aggressive sales growth through its highly successful grassroots marketing, targeted distribution, brand image, and celebrity-brand association. Skullcandy markets to multiple markets simultaneously and attracts a widely diversified consumer base, allowing it to successfully expand its product lines in international growth. Currently, Skullcandy has begun its European expansion through a direct business-to-consumer online based approach and is determined to penetrate the rapidly growing Chinese market as well.
Skullcandy is currently trading at a P/E of 15.31 and a forward P/E of only 8.59 for year 2012. Its PEG ratio is at 0.75, price-to-sales only 1.21, and current ratio of 2.97. Its earnings growth for 2012 is projected at 213.62% and 5-year projected earnings growth is at 20.42%, which I believe is conservative. Also, to make things even more attractive, Skullcandy has experienced rapid EBITDA margin growth at an annualized rate of 21.2% from 2007-2011. With recent acquisitions, Skullcandy has experienced margin compression from a strategic shift to over-ear headphones, which is where the market is currently trending towards.