What happened

Shares of online postage seller Stamps.com (STMP) soared 120% in the first half of 2020, according to data from S&P Global Market Intelligence. The S&P 500 returned negative 3.1% over this period.

In 2020, Stamps.com stock is up 145% through July 8, compared with the broader market's negative 1% return so far this year. That makes it the year's second best-performing mid-cap tech stock behind China's 21Vianet Group. (Mid-caps have market caps between $2 billion and $10 billion.)

Five stamps. One each with an airplane, a hot air balloon, a dolphin, a mountain, and a man.

Image source: Getty Images.

So what

We can attribute Stamps.com stock's powerful performance this year to the company posting results that beat Wall Street's expectations. The chart below shows the stock's surges after the company reported Q4 2019 results on Feb. 19 and Q1 2020 results on May 7.

In Q1, Stamps.com's revenue rose 11% year over year to $151.3 million. Reported net income was $16.5 million, which translated to $0.91 per share, up 4% year over year. Adjusted for one-time items, earnings per share landed at $1.32, up 7% from the year-ago period. That result sped by the $0.97 analyst consensus estimate.

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

Amidst the unprecedented challenges imposed by COVID-19 on the global economy, e-commerce has become an indispensable strategy for businesses and we're extremely proud that our world leading technology and employees are able to provide a critical technology service for our customers and partners. Stamps.com is prioritizing our employees, customers, partners, and communities, while continuing to provide exceptional service levels and support to our customers and partners. We are in a position to provide valuable services to mailers and shippers coping with this worldwide health crisis and remain committed to making significant strides toward our goal of being the leading worldwide multi-carrier e-commerce software company. 

STMP Chart

Data by YCharts.

Now what

Stamps.com is making good progress growing its revenue after it announced in early 2019 that it was terminating its exclusive deal to sell postage for mail and parcels shipped via the United States Postal Service.

For full-year 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, representing a decline at the midpoint of 21%.