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Stamps.com, Inc.

by Michael Vodicka

December 06, 2011 | Comments : 0 Recommended this article: (0)

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Stamps.com, Inc. ( STMP - Snapshot Report ) has seen big gains over the last few months, recently hitting a new all-time high after reporting another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock will deliver momentum to your portfolio.

Company Description

Stamps.com, Inc. provides Internet-based postage solutions. The company was founded in 1996 and has a market cap of $384 million.

STMP has seen big gains over the last few months, but shares got an extra boost on October 27 when the company reported strong Q3 results that came in ahead of expectations.

Third-Quarter Results

Revenue for the period was up 20% from last year to $25 million. Earnings also came in strong at 30 cents, 30% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 75% over the last four quarters.

Strong sales growth was coupled with an impressive margin profile, with PC Postage gross margin coming in at 77.7%.

Financial Profile

Stamps.com will continue to benefit from its strong financial profile, with cash and short-term investments of $40 million and no long-term debt.

Estimates

We saw some bullish movement in estimates off the good quarter, with the current year adding 10 cents to $1.09, a 118% growth projection from last year.

Valuation

With a forward P/E of 24X, STMP trades at a premium to the market and its peers.

12-Month Chart

On the chart, shares hit a new multi-year high in late October on the good quarter. Look for support from the trend line on any weakness, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

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