STMP

Stamps.com Inc

TMT, Consumer


Presented:11/08/2017
Price:$177.30
Cap:$3.29B
Current Price:$329.61
Cap:$5.66B

Presented

Date11/08/2017
Price$177.30
Market Cap$3.29B
Ent Value$3.71B
P/E Ratio23.24x
Book Value$23.78
Div Yield0%
Shares O/S18.55M
Ave Daily Vol415,743
Short Int34.44%

Current

Price$329.61
Market Cap$5.66B
Stamps.com, Inc. engages in the provision of Internet-based mailing and shipping solutions. It enables small businesses, enterprises, and online retailers to print U.S. Postal Service-approved postage. It operates under the Stamps.com, Endicia, ShipStation, ShipWorks, and ShippingEasy brands. The company was founded by James A. C. McDermott, Jeff Green and Air R. Engelberg in September 1996 and is headquartered in El Segundo, CA.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), FedEx Corp (FDX), Pitney Bowes Inc (PBI), Shopify Inc (SHOP), Stamps.com Inc (STMP), United Parcel Service Inc (UPS), VeriSign Inc (VRSN)

Highlights

The presenter has been long shares of Stamps.com (STMP) for some time now, and said he used the recent, sharp decline from $225 to $180 following 3Q 2017 earnings to add to his position. In his view, STMP is a software company trading at an unjustifiably cheap multiple due to overblown concerns about its ability to participate in the US Postal Service (USPS) reseller program longer-term, competition, and 4Q 2017 guidance. At ~$180 the risk/reward favors bulls. Downside should be limited to $150-160 in a worst case scenario (12x $12 of FCF/share plus $12 per share of cash); and upside should be driven by a business growing 30-40% annually on the back of e-commerce growth in the US, a symbiotic relationship with the USPS, and capital deployment.

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