What happened

Shares of online postage seller Stamps.com (STMP) skyrocketed 89.4% in February, according to data from S&P Global Market Intelligence.

That performance is even better than it might seem at first glance when you consider that the S&P 500 Index dropped 8.2% last month. The market's sell-off was driven by concerns that the spread of the novel coronavirus and the disease it causes, COVID-19, could blunt global economic growth.

In 2020, Stamps.com stock is up 60% through March 4, compared with the broader market's negative 2.8% return so far this year. 

Five depictions of (not real) stamps: one with an airplane, one with a hot air balloon, one with a dolphin swimming in the ocean with a lighthouse in background, one with a mountain, and one with a man with a wreath on his head.

Image source: Getty Images.

So what

We can attribute Stamps.com stock's powerful performance last month to the tech company's Feb. 19 release of fourth-quarter 2019 results and 2020 guidance that delighted investors. Shares soared 65.5% the next day and tacked on another 10.4% the day after that. 

In Q4, revenue fell 5% year over year to $160.9 million, easily topping the $144.7 million Wall Street consensus estimate. Adjusted for one-time items, earnings per share (EPS) declined 43% to $2.12, but that was still good enough to crush the $1.03 analyst expectation.

Here's what CEO Ken McBride had to say in the earnings release:

In 2019, we continued to make significant strides toward our goal of being the leading worldwide multi-carrier e-commerce software company. We continued to invest in our products and partnerships throughout 2019 to address the significant opportunities in the U.S. and internationally. We are very excited about our business prospects in 2020 and beyond.  

STMP Chart

Data by YCharts.

As the above chart shows, shares of Stamps.com gave back some of their gains at the end of the month. The stock fell along with the overall market when news came out that COVID-19 had spread considerably beyond China, where it originated. 

The 10-year chart below shows the bigger picture. After running up pretty steadily for many years, the stock plunged early last year after the company announced it was terminating its exclusive deal to sell postage for mail and parcels shipped via the United States Postal Service (USPS).

STMP Chart

Data by YCharts.

Now what

The company's fortunes seem to be turning around. Management is optimistic about 2020, thanks to what McBride called on the earnings conference call a "great new partnership with UPS" and a new contract with the USPS.

For 2020, management guided for revenue between $570 million and $600 million, representing growth at the midpoint of 2.3% year over year. It expects adjusted EPS of $4.00 to $5.00. Going into the earnings report, Wall Street had only been looking for adjusted EPS of $3.23 on revenue of $540 million.