Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Stamps.com ( STMP) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Stamps.com as such a stock due to the following factors:

  • STMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.0 million.
  • STMP has traded 53,386 shares today.
  • STMP is up 24% today.
  • STMP was down 8.5% yesterday.

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More details on STMP:

Stamps.com Inc. provides Internet-based postage solutions in the United States. STMP has a PE ratio of 41. Currently there is 1 analyst that rates Stamps.com a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Stamps.com has been 162,900 shares per day over the past 30 days. Stamps.com has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.56 and a short float of 3% with 1.29 days to cover. Shares are up 50.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Stamps.com as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 32.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • STMP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.42, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for STAMPS.COM INC is currently very high, coming in at 82.32%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -2.20% is in-line with the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 113.2% when compared to the same quarter one year ago, falling from $7.33 million to -$0.97 million.
  • Net operating cash flow has declined marginally to $17.10 million or 7.44% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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