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 (NASDAQ: STMP  ) 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.

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