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Stamps.com is scheduled to
report Q208 results after the market closes on July 23. Based on
our analysis, we at
eChristianInvesting are expecting STMP’s to report
disappointing results that miss the Street’s consensus
expectations.
We are
forecasting revenues of $20M versus analyst consensus of $21M.
This would represent a 7% drop in revenues from last year’s
$21.4M in the same period.
In
particular, we are very disturbed by the apparent drop in
traffic levels to the company’s flagship website. In addition,
aggressive sales & marketing offers late in the quarter also
provide an indication of lagging sales and represent desperate
moves to try and steady the ship.
Stamp’s shares have been
one of the few bright spots in the Internet sector this year. To
date, the shares have appreciated over 9% versus a 14% drop in
the broader market indexes. Much of the boost in the stock price
has come this month as traders hope that STMP’s business model
proves resilient in the face of deteriorating economic
conditions.
Shares are
now trading at 19x consensus 2009 EPS estimates. This represents
a slight discount to their peer group. Our believe is that there
is no compelling
reason to own these shares until we can see either real
improvement in economic conditions or until they can adequately
demonstrate their ability to grow their business even in
difficult economic environments.
At the time this article was
published, the author did not have a financial position in any
of the stocks mentioned in this article.
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