Trade-Ideas LLC identified Stamps.com ( STMP) as a "perilous reversal" (up big yesterday but down 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 $41.0 million.
  • STMP has traded 126,479 shares today.
  • STMP is down 4.7% today.
  • STMP was up 38.1% 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 253. Currently there are 2 analysts that rate Stamps.com a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Stamps.com has been 262,300 shares per day over the past 30 days. Stamps.com has a market cap of $1.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.27 and a short float of 11.1% with 3.40 days to cover. Shares are up 118.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Stamps.com as a buy. 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, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 36.6%. 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. To add to this, STMP has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, STMP's share price has jumped by 104.63%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The gross profit margin for STAMPS.COM INC is currently very high, coming in at 78.34%. Regardless of STMP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.07% trails the industry average.
  • STAMPS.COM INC's earnings per share declined by 27.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STAMPS.COM INC reported lower earnings of $2.24 versus $2.68 in the prior year. This year, the market expects an improvement in earnings ($3.40 versus $2.24).

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