IOMEGA ZIPS TO FRONT ON WALL STREET.

Byline: Dawn Yoshitake Daily News Staff Writer

Iomega Corp., which got its legs while touted on a computer investor bulletin board, is now barreling down Wall Street.

The Utah-based portable disk-drive maker developed a tremendous following of bulls and bears on The Motley Fool site on America Online. Those on-line discussions filled one electronic folder after another at a rate that seemed to match the run-up of its stock.

That caught the attention of Wall Street, which has since pushed its shares to 51-1/4 at the close Thursday - up nearly ninefold since its $6 range just four months ago.

Investors who jumped into the stock early last year have captured t3he equivalent of a 300-point gain following Iomega's three-for-one and two-for-one stock splits since January.

``When we were recommending the stock a year-and-half ago, 100 shares were selling for $900. But with the splits, those same shares would be 600 shares and worth $31,000 today,'' said Joseph Besecker of Emerald Research, the research arm of Emerald Asset Investment in Lancaster, Pa.

So, what's fueling the engine?

Analysts and industry watchers point to a surge in sales and talk that Iomega's high-capacity Zip drive may soon become the industry standard in replacing computer floppy drives by offering more storage capacity by a 70-fold margin.

Packard Bell Electronics Inc. said Thursday that it's shipping a PC that includes Iomega's Zip drive. Meanwhile, computer maker Acer announced a day ago it would use Iomega's drives in its AcerBasic PC Internet computer that is expected to ship in June. Hewlett-Packard Co. also made a similar announcement in March that Zip drives will be an option in its Pavilion line of PCs.

``I think additional deals will come. But the question is will this be the standard to replace the floppy drive,'' said David Gardner, co-founder of The Motley Fool. ``A lot of investors believe this and a lot of OEMs have brought about this destiny.''

Sales reached $326.2 million last year, more than doubling from $141.4 million the previous year. And during the first quarter, sales jumped to $222 million - nearly a sixfold rise over the same period a year ago.

Profits, which remained elusive in 1994 and 1993, reached $8.5 million last year.

A number of Wall Street watchers consider Iomega's share price to be wildly overvalued at nearly 124 times 1996 earnings estimates.

But Gardner said he finds Iomega's stock fairly valued.

``Let's take U.S. Robotics. It's a great company and doing $1 billion in sales and has a market cap of about $8.4 billion. It's trading about six times sales,'' he said. ``Iomega, I think, will be in excess of a $1.5 billion in sales, and its stock is trading at four times sales.''

Wall Street expects Iomega to announce the per-share price next week for a secondary offering of 5 million shares.

``They need to raise this money to achieve their goal of getting their drives in every (computer) box,'' Besecker said.

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Chart: (Color) IOMEGA Shares

Bradford Mar/Daily News