What happened

Shares of Stamps.com (NASDAQ:STMP) climbed 34.8% in August, according to data from S&P Global Market Intelligence, after the beaten-down online-postage specialist announced encouraging quarterly results and raised its full-year outlook.

Stamps.com stock soared 27% on Aug. 8, 2019 alone -- the first trading day after the company told investors its second-quarter revenue declined 0.6% year over year to $138.8 million, translating to a more than 50% decline in adjusted net income to $22.3 million, or $1.25 per share. Recall that Stamps.com's top- and bottom-line performance is still under pressure on the heels of management's surprise decision in February to end the company's exclusive partnership with the U.S. Postal Service (USPS) in order to embrace partnerships with other carriers in the increasingly competitive shipping industry.

Hand putting stamp on white envelope.


So what

To be clear, Stamps.com chairman and CEO Ken McBride noted their second-quarter results were essentially in line with expectations -- though even that left investors breathing a sigh of relief considering the stock was still reeling from not only its big drop after the February news, but also after the company lowered its already sobering guidance in May due to the potential fallout of the USPS renegotiating service agreements with some of Stamps.com's reseller partners.

During last month's call, however, McBride explained that Stamps.com was seeing "a positive shift in the USPS's negotiating position with" those partners -- a potential indication that the government entity is beginning to realize the value those resellers were bringing to the table.

Now what

As such, Stamps.com revised its 2019 outlook for the better, calling for revenue of $520 million to $560 million (up $10 million from the lower end of its old range), and adjusted earnings per share (EPS) of $3.60 to $4.85 (up $0.25 per share from the bottom end of its previous target).

And Stamps.com isn't pumping the breaks anytime soon. Just last week, the company launched its new GlobalPost International shipping services to address concerns and avoid disruptions related to the United States leaving the Universal Postal Union (UPU).

"We know customers simply can't afford disruptions to their shipping services," McBride said. "That's why we're proud to be able to offer these GlobalPost services to our many international shipping customers who have been concerned about the potential USPS disruption caused by the breakdown of the UPU/U.S. relationship."

In the end, it's hard to blame Stamps.com for making the most of an otherwise frustrating situation. If that helps spur its post-USPS turnaround, and with shares still trading down nearly 70% over the past year as of this writing, I suspect Stamps.com stock could still prove an enticing value for investors today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.