Stamps.com Inc. (NASDAQ: STMP) is headed up in the market this morning, making up for some of the losses that the stock experienced on Friday. While no news has been released, there is a good reason for the gains. Today, we’ll talk about:
- Why STMP is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why STMP Stock Is Headed Up
As mentioned above, while no news has been released by the company, Stamps.com is making its way for the top, making up for losses seen Friday. Nonetheless, there’s a good reason for the gains. To get an understanding of what’s happening, let’s start by talking about what happened Friday.
On Friday morning, STMP announced that it was breaking ties with USPS. Previously, Stamps.com had an exclusive relationship with USPS, one that was key to the company’s success thus far.
However, the company was no longer a fan of exclusivity. Pointing to the fact that consumer shipping needs are changing and that no one carrier is likely to meet the needs of all of its consumers, the company said that it would be cutting ties with the shipping giant.
Instead, it will be looking to build relationships with other giants like FedEx and UPS.
Unfortunately, this proved to be the reason for dampened revenue expectations on the company’s earnings report. At the end of the day, with the ties cut, the company is entering into the unknown in some ways, and will need to work hard to get revnue back to where it was.
Nonetheless, investors are starting to see opportunity here. After STMP took such a steep dive, many believe it to be undervalued. After all, the company has a large customer base and top-notch technology driving its website.
As a result, many are taking the Warren Buffett approach here. They’re buying while fear is high, hoping to capitalize on a discount.
What We’re Seeing From The Stock
While there has been no news released today, a rebound in Stamps.com was to be expected. After all, Friday’s declines were excessively harsh, which opened the door to a strong run today.
So, it’s not surprising to see that investors are jumping in. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:38), STMP is trading at $94.84 per share after a gain of $11.19 per share or 13.38% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on STMP. In particular, we’re interested in following the story surrounding the company’s continued work to expand its product offering through partnerships with various shipping giants. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!
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