Stamps.com's (NASDAQ:STMP) investors may remember 2019 as one of the most painful experiences of their investing journey. Between late February and early May, shares of the internet-based shipping software provider fell 81%. In February, the company announced it would be terminating its exclusive shipping partnership with the U.S. Postal Service (USPS).

Consequently, in May, the company reduced its 2019 full-year guidance range from $540 million-$570 million to $510 million-$560 million. In only a few months, Stamps.com morphed into one of the worst-performing stocks of 2019.

Green mailbox with flag up.

Image Source: Getty Images.

However, in September 2019, at the writing of this article, the stock price is hovering above $70 per share. It is already up by more than 80% from its 52-week low of $32.54. Such an extreme ascent of the stock price in only a few months is good news for the company's heartbroken investors. However, this price increase is not enough. The key question is whether Stamps.com has what it takes to regain its glory in a sustainable way. Moreover, what are the reasons why the company may have a shot at meeting or even exceeding investors' expectations?

Stamps.com Year To Date Price Gain

Source: YCHARTS

A sound strategy and direction

During the recent quarterly earnings report, Chairman and CEO Ken McBride discussed the company's new strategic model. Stamps.com is transitioning from a domestic, single-carrier business model to a global, multi-carrier strategy. The importance of such a strategic transition is better understood with the backdrop of changes in the shipping industry. All carriers are making strategic changes to their operating models. For example, United Parcel Service is adding 7-day delivery. FedEx is focusing on becoming the leading low-cost carrier for residential e-commerce shipping. Amazon continues to enhance its shipping capabilities. The strategy to move away from an exclusive partnership with USPS aligns Stamps.com with the changes in the shipping industry.

A competitive direct sales team 

Stamps.com has a national direct sales team that can act on behalf of any partner carrier. Stamps.com's sales team can resell carriers' shipping services to e-commerce providers and help them capture a bigger share of the market. Additionally, the company has established relationships and technical integrations with a myriad of e-commerce platforms, such as Amazon and Shopify. Combine such alliances with the company's sales team, Stamps.com can be a competitive lever for any carrier to pull and compete with its competitors. 

Better-than-expected execution 

The future success for Stamps.com hinges on its ability to negotiate and partner with all contributors in the evolving shipping ecosystem. One such successful partnership came through recently. During the company's Q2 quarterly earnings call, the company discussed an agreement between its ShipStation unit and Alibaba. It allows U.S.-based sellers to manage and ship their Alibaba-generated orders better and more efficiently. While this agreement is still in its nascent stage, it is a sign that the company is executing as planned. 

Stronger evidence of the company's ability to execute is in its recent positive adjustment to the full-year 2019 revenue forecast. In August, the company increased the lower end of its full-year revenue forecast by $10 million. This increase indicates a better-than-expected execution by Stamps.com and may give investors early signs of a better future for the stock.

Metrics (in million) Lower End Higher End
Full-year revenue guidance-Q1 earnings

$510

$560
Full-year revenue guidance-Q2 earnings $520 $560
Delta $10 n/a

Data source: Stamps.com.

Final takeaway

Stamps.com's stock performance in the first half of 2019 transformed the company into one of the worst-performing market players. However, the company has what it takes to regain its glory and even grow further. Its strategic transition to align with the evolution of the shipping industry, the company's established sales team, emerging new partnerships, and better-than-expected sales performance are among the indicators that investors may consider when they decide about the fate of their investment.