What happened
The stock of Stamps.com (STMP) outperformed a surging stock market last month. Shares jumped 25% in May compared with a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.
The rally added to significant gains for investors: The stock has more than doubled so far in 2020 while the broader market is down slightly.
Image source: Getty Images.
So what
In an early May earnings report, the postage specialist revealed plenty of good news for investors. First-quarter sales jumped 11% and earnings rose 5% to $16.5 million. Management was clear about how the coronavirus pandemic was pushing more business online and lifting its results. "We are in a position to provide valuable services to mailers and shippers coping with this worldwide health crisis," CEO Ken McBride said in a press release.
Now what
Despite the COVID-19 demand boost, McBride and his team simply affirmed their full-year outlook that calls for sales to land between $570 million and $600 million, translating into just a modest increase over 2019's results. Yet that forecast was better than most investors had expected, and that surprise helped lift the stock last month. Stamps.com's long-term returns will depend on management's success in sustaining the growth momentum achieved over the last few months.
