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Bull of the Day: Stamps.com (STMP)

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Stamps.com (STMP - Free Report) is a leading provider of digital postage services, helping small businesses, enterprises, and consumers print U.S. Postal Service-approved postage right from their home or office. Users can easily mail or ship letters, packages, or parcels.

Blowout Q4 Earnings

Stamps.com skyrocketed 65.5% the day after it released fourth quarter results, plus another 10.5% the day after that. Last month alone saw shares climb nearly 90%.

The company crushed expectations on both the top and bottom line, posting earnings of $2.12 per share (vs. $1.03 per share) and revenue of $160.9 million (vs. $144.7 million).

Stamps.com has also secured a new partnership with UPS (UPS - Free Report) , as well as a new long-term agreement with the United States Postal Service. Last February, the firm terminated its exclusive deal with the USPS, which had been a crucial relationship for STMP.

“In 2019, we continued to make significant strides toward our goal of being the leading worldwide multi-carrier e-commerce software company. We continued to invest in our products and partnerships throughout 2019 to address the significant opportunities in the U.S. and internationally. We are very excited about our business prospects in 2020 and beyond,” said CEO Ken McBride.

Looking ahead, management guided for 2020 revenue between $570 million and $600 million, with adjusted EPS between $4.00 and $5.00 per share. Before the release of its Q4 earnings, Wall Street had only been anticipating revenue of $540 million and earnings of $3.23.

Shares are Surging

 

Stamps.com Inc. Price and Consensus

 

Along with reassuring investors about its growth prospects, STMP has been one of the few stocks to weather the coronavirus-related sell-off these past few weeks. Shares of Stamps.com are up over 48% and 78% in the last one and six months, respectively. Comparatively, the S&P 500 has lost about 12.6% and 2%.

Earnings estimates have been on the rise, and Stamps.com is a Zacks Rank #1 (Strong Buy) pick right now.

For the current fiscal year, two analysts have revised their bottom line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up one dollar from $3.31 to $4.31. 2021 looks strong too, with earnings seeing positive year-over-year growth.

If you’re an investor searching for an internet stock to add to your portfolio, make sure to keep STMP on your shortlist.

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