Why Stamps.com Shares Were Returned to Sender


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Stamps.com are taking a licking today, sitting on losses of over 15% following a mixed earnings report with tepid forward guidance.

So what: Stamps.com reported fourth-quarter revenue of $30.1 million and earnings per share of $0.47, which missed top-line estimates of $31.4 million but managed to beat Wall Street's consensus of $0.44 per share. The worse news was contained in the company's guidance for 2013. Stamps.com now sees $120 million to $130 million in revenue and $1.75 to $1.95 in EPS for the entire fiscal year. Both of these ranges fall below the current consensus of $132.4 million in revenue and $1.96 in EPS.

Now what: The most unpleasant revelation here is Stamps.com's low earnings range, which even at the high end would represent a 15% decline from fiscal 2012's GAAP result of $2.30 per share. That's a rather steep drop, but with the Post Office already planning further delivery cutbacks, it's not altogether too surprising. Stamps.com is cheap right now on a P/E basis, but with negative growth in store, it looks a bit more like a value trap than deep value.

Want more news and updates? Add Stamps.com to your watchlist now.

A fresh idea for 2013
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

The article Why Stamps.com Shares Were Returned to Sender originally appeared on Fool.com.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.