STMP Stock Rockets 25% on Q2 Earnings Results

STMP stock

STMP stock is having a solid rally on Thursday after Stamps.com Inc. (NASDAQ:STMP) posted a better-than-estimated second quarter and lifted its guidance for the year.

Robust Earnings

Internet-based shopping and mailing service provider Stamps.com has been in all sorts of trouble after the termination of its exclusive deal with the US Postal Service earlier this year. STMP stock plunged significantly during that time, and eventually, the company had to cut its outlook for 2019.

However, it seems that the painful period is over for Stamps.com for the time being, if its Q2 2019 financial results are anything to go by. The company released its Q2 2019 results on Wednesday, and the numbers proved to be impressive, beating analysts’ estimates.

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More importantly, the company raised its outlook for the rest of the year as well, and STMP stock started rallying in today’s trading yesterday, gaining as much as 25% at $57.90.

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In the second quarter, the company earned $14 million, which translated to earnings per share of 79 cents. In the prior-year period, Stamps.com generated $45.5 million in earnings and clocked earnings per share of $2.41. Total sales for the period came in at $138.8 million, but it reflected a 1% drop from the $139.6 million it had earned in the same quarter in 2018. However, it beat analysts’ estimates of $130 million in sales for the quarter.

It was the company’s projections for the rest of the year that was perhaps one of the most important factors behind the stock rally. Stamps.com stated that it expects its full-year revenue for 2019 to be in the range of $520 million and $560 million. Previously, the company had projected the revenues to be between $510 million and $560 million. Previously, it had pegged its profits for the year to be between $21 million and $45 million, but now the company has raised it to a range between $27 million and $45 million. It goes without saying that this is a massive jump in projections and the rally in STMP stock was hence not a surprise at all.

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Featured image: DepositPhotos © leungchopan