As the holiday season gets into high gear, some companies are seeing an increase in mails sent or received. Not only are mails changing hands but company CEOs as well. This leaves one to wonder if it is indeed time to “push the envelope.”
The U.S. Postal Service
The U.S. Postal Service is a large entity that is still growing and already is worth almost $68 billion. However, although it is worth so much in value, still at times it finds itself on the losing end of the line. Each year, the U.S. Postal Service loses money in the billions of dollars because of how it conducts its business. An important point to note is that the postal service does not lose money from any envelopes posted or received there, but instead losses incurred due to lack of business expertise carried out by persons in charge.
Not only is the service used to send and receive mail, but it also deals with other matters as well and among those other matters is the service it renders to some U.S. citizens whereby the postal service is responsible to carry out pre-paying retiree health benefits on a yearly basis in the tune of $5.5 billion.
Although the postal agency is still used by many persons living in the U.S., there is strong competition facing it. Competition can be seen in the forms of phoning, texting, emailing and social media like Twitter and Face Book. Gone are the days when everyone depended on postal services to get their messages to friends and family members living far away. Instead, technology and innovation are playing big parts in how people communicate nowadays. Unlike the mail, which might sometimes take days to reach its destination, making a single phone call on the cell, texting and even sending email takes only seconds. In addition, chatting on some social media sites like Face Book and others are instantaneous and will make both persons feel closely linked.
Taking a closer look at Stamps.com
Stamps.com (STMP, Financial) has the approval of the U.S. Postal Service and is presently catering to small businesses, online retailers and home based offices. It allows customers to buy and carry out their own online print postage through software authorized by the postal service.
For three years in a row, Stamps.com share value climbed by 87%, thus making it a worthy company to invest in, especially if one is after long-term gains investment. So far, the company has proved to be a safe stock that investors can buy into in order to improve their portfolio.
In the company’s third quarter of November 5, the yearly revenue growth was shown to be 21% and figure stood at $38 million. Most of Stamps’ growth can be seen as the result of acquiring new customers for their online business as well as practicing proper business techniques. In the third quarter alone, the online company acquired about 67,000 new customers that ended up doing business with them. The revenue of the average subscriber with their paid customers on the books went up to $23.86, which is 12%.
Stamps.com core business gross margin took a downward slide by 100 bps to 80.2% against that of 2013 third quarter gain of 81.2%. The company got 71 cents on its earning share per cost figure, which is a higher amount of 15% to that of 2013.
Future prospects of Stamps.com
After this holiday season, Stamps.com is expected to grow in a big way since many customers will be buying stamps to mail items across the U.S. In addition, growth will be fueled by growing online purchases made by customers. Since July and September of 2014, the company’s growth annualized rate was found to be at 3.9%, which is an increase from 3.5% as reported by the Bureau of Economic Analysis.
In the future, the ecommerce industry of North America is expected to push at an upward rate of 33% for the remainder of 2014 and at 31.7% in the coming 2015. As the company moves forward in the right direction, expected growth would accelerate straight into 2016 and beyond.
As the latest quarter drew near closure, Stamps.com acquired ShipWorks to its portfolio. ShipWorks is an amazing company to be a part of and they already work with over 50 giant online sales and marketing companies inclusive of eBay (EBAY, Financial), PayPal, Yahoo! (YHOO, Financial) and Amazon (AMZN, Financial). With the acquiring of ShipWorks, Stamps.com is expected to move into a strong financial position that will make it and investors see a growth of 12% in 2015.
The postal and envelop business hold a strong enough financial position, one that will give way to growth if stable economic climate in the US will present itself. However, investors on the stock exchange keeping an eye on Stamps.com should not give way to reaching an over confidence level in regards to the company, but instead should watch to see if the company will continue performing at its best.
