Intrinsic value of Stamps.com - STMP

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$146.30

  Intrinsic Value

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  Value-price divergence*

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$146.30

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of STMP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  70.09
  51.40
  46.76
  42.58
  38.83
  35.44
  32.40
  29.66
  27.19
  24.97
  22.98
  21.18
  19.56
  18.10
  16.79
  15.61
  14.55
  13.60
  12.74
  11.96
  11.27
  10.64
  10.08
  9.57
  9.11
  8.70
  8.33
  8.00
  7.70
  7.43
  7.19
Revenue, $m
  364
  551
  809
  1,153
  1,601
  2,168
  2,871
  3,722
  4,735
  5,917
  7,276
  8,818
  10,542
  12,451
  14,542
  16,813
  19,260
  21,878
  24,665
  27,616
  30,728
  33,998
  37,424
  41,005
  44,742
  48,635
  52,687
  56,901
  61,281
  65,833
  70,564
Variable operating expenses, $m
 
  114
  167
  238
  330
  447
  591
  767
  975
  1,219
  1,499
  1,816
  2,172
  2,565
  2,996
  3,463
  3,967
  4,507
  5,081
  5,689
  6,330
  7,004
  7,709
  8,447
  9,217
  10,019
  10,853
  11,722
  12,624
  13,562
  14,536
Fixed operating expenses, $m
 
  183
  188
  193
  198
  203
  208
  213
  218
  224
  229
  235
  241
  247
  253
  259
  266
  272
  279
  286
  293
  301
  308
  316
  324
  332
  340
  349
  357
  366
  375
Total operating expenses, $m
  244
  297
  355
  431
  528
  650
  799
  980
  1,193
  1,443
  1,728
  2,051
  2,413
  2,812
  3,249
  3,722
  4,233
  4,779
  5,360
  5,975
  6,623
  7,305
  8,017
  8,763
  9,541
  10,351
  11,193
  12,071
  12,981
  13,928
  14,911
Operating income, $m
  120
  254
  454
  723
  1,074
  1,519
  2,072
  2,743
  3,541
  4,475
  5,548
  6,766
  8,130
  9,639
  11,293
  13,090
  15,026
  17,099
  19,305
  21,641
  24,105
  26,694
  29,407
  32,242
  35,201
  38,284
  41,493
  44,830
  48,300
  51,905
  55,652
EBITDA, $m
  139
  266
  471
  747
  1,108
  1,565
  2,133
  2,822
  3,642
  4,601
  5,703
  6,954
  8,354
  9,905
  11,603
  13,448
  15,437
  17,565
  19,831
  22,230
  24,759
  27,418
  30,204
  33,116
  36,154
  39,320
  42,615
  46,042
  49,605
  53,307
  57,155
Interest expense (income), $m
  3
  1
  4
  7
  11
  17
  24
  32
  43
  56
  70
  87
  106
  128
  151
  177
  205
  236
  268
  303
  339
  378
  419
  461
  506
  552
  600
  651
  703
  757
  814
Earnings before tax, $m
  117
  253
  450
  716
  1,062
  1,502
  2,048
  2,710
  3,498
  4,419
  5,478
  6,679
  8,024
  9,512
  11,142
  12,913
  14,821
  16,863
  19,037
  21,338
  23,765
  26,316
  28,988
  31,781
  34,696
  37,732
  40,893
  44,180
  47,597
  51,148
  54,838
Tax expense, $m
  42
  68
  122
  193
  287
  406
  553
  732
  944
  1,193
  1,479
  1,803
  2,166
  2,568
  3,008
  3,486
  4,002
  4,553
  5,140
  5,761
  6,417
  7,105
  7,827
  8,581
  9,368
  10,188
  11,041
  11,929
  12,851
  13,810
  14,806
Net income, $m
  75
  184
  329
  523
  776
  1,097
  1,495
  1,979
  2,554
  3,226
  3,999
  4,876
  5,857
  6,944
  8,134
  9,426
  10,819
  12,310
  13,897
  15,577
  17,349
  19,211
  21,161
  23,200
  25,328
  27,545
  29,852
  32,251
  34,746
  37,338
  40,032

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  108
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  610
  760
  1,116
  1,591
  2,208
  2,991
  3,960
  5,134
  6,530
  8,161
  10,037
  12,162
  14,541
  17,174
  20,058
  23,190
  26,565
  30,177
  34,021
  38,092
  42,384
  46,894
  51,619
  56,559
  61,713
  67,083
  72,671
  78,484
  84,525
  90,804
  97,329
Adjusted assets (=assets-cash), $m
  502
  760
  1,116
  1,591
  2,208
  2,991
  3,960
  5,134
  6,530
  8,161
  10,037
  12,162
  14,541
  17,174
  20,058
  23,190
  26,565
  30,177
  34,021
  38,092
  42,384
  46,894
  51,619
  56,559
  61,713
  67,083
  72,671
  78,484
  84,525
  90,804
  97,329
Revenue / Adjusted assets
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
  0.725
Average production assets, $m
  131
  352
  517
  737
  1,023
  1,386
  1,834
  2,379
  3,025
  3,781
  4,650
  5,634
  6,737
  7,956
  9,292
  10,743
  12,307
  13,980
  15,761
  17,647
  19,635
  21,725
  23,914
  26,202
  28,590
  31,078
  33,667
  36,360
  39,159
  42,067
  45,090
Working capital, $m
  88
  -21
  -31
  -44
  -61
  -82
  -109
  -141
  -180
  -225
  -277
  -335
  -401
  -473
  -553
  -639
  -732
  -831
  -937
  -1,049
  -1,168
  -1,292
  -1,422
  -1,558
  -1,700
  -1,848
  -2,002
  -2,162
  -2,329
  -2,502
  -2,681
Total debt, $m
  147
  105
  197
  319
  478
  679
  928
  1,230
  1,588
  2,007
  2,489
  3,036
  3,647
  4,324
  5,065
  5,870
  6,737
  7,666
  8,653
  9,700
  10,803
  11,962
  13,176
  14,446
  15,770
  17,150
  18,587
  20,080
  21,633
  23,247
  24,924
Total liabilities, $m
  237
  195
  287
  409
  568
  769
  1,018
  1,320
  1,678
  2,097
  2,579
  3,126
  3,737
  4,414
  5,155
  5,960
  6,827
  7,756
  8,743
  9,790
  10,893
  12,052
  13,266
  14,536
  15,860
  17,240
  18,677
  20,170
  21,723
  23,337
  25,014
Total equity, $m
  373
  565
  829
  1,182
  1,641
  2,222
  2,942
  3,815
  4,852
  6,064
  7,457
  9,036
  10,804
  12,760
  14,903
  17,230
  19,738
  22,422
  25,278
  28,302
  31,491
  34,842
  38,353
  42,023
  45,853
  49,843
  53,995
  58,313
  62,802
  67,468
  72,316
Total liabilities and equity, $m
  610
  760
  1,116
  1,591
  2,209
  2,991
  3,960
  5,135
  6,530
  8,161
  10,036
  12,162
  14,541
  17,174
  20,058
  23,190
  26,565
  30,178
  34,021
  38,092
  42,384
  46,894
  51,619
  56,559
  61,713
  67,083
  72,672
  78,483
  84,525
  90,805
  97,330
Debt-to-equity ratio
  0.394
  0.190
  0.240
  0.270
  0.290
  0.310
  0.320
  0.320
  0.330
  0.330
  0.330
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
Adjusted equity ratio
  0.528
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743
  0.743

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  75
  184
  329
  523
  776
  1,097
  1,495
  1,979
  2,554
  3,226
  3,999
  4,876
  5,857
  6,944
  8,134
  9,426
  10,819
  12,310
  13,897
  15,577
  17,349
  19,211
  21,161
  23,200
  25,328
  27,545
  29,852
  32,251
  34,746
  37,338
  40,032
Depreciation, amort., depletion, $m
  19
  12
  17
  25
  34
  46
  61
  79
  101
  126
  155
  188
  225
  265
  310
  358
  410
  466
  525
  588
  655
  724
  797
  873
  953
  1,036
  1,122
  1,212
  1,305
  1,402
  1,503
Funds from operations, $m
  160
  196
  346
  547
  810
  1,143
  1,556
  2,058
  2,654
  3,352
  4,154
  5,064
  6,082
  7,209
  8,443
  9,784
  11,230
  12,776
  14,422
  16,165
  18,003
  19,935
  21,958
  24,074
  26,281
  28,581
  30,974
  33,463
  36,051
  38,740
  41,535
Change in working capital, $m
  12
  -7
  -10
  -13
  -17
  -22
  -27
  -32
  -38
  -45
  -52
  -59
  -66
  -73
  -79
  -86
  -93
  -100
  -106
  -112
  -118
  -124
  -130
  -136
  -142
  -148
  -154
  -160
  -166
  -173
  -180
Cash from operations, $m
  148
  308
  356
  560
  827
  1,165
  1,583
  2,090
  2,693
  3,397
  4,206
  5,122
  6,147
  7,281
  8,523
  9,871
  11,322
  12,876
  14,528
  16,277
  18,122
  20,059
  22,089
  24,210
  26,423
  28,729
  31,128
  33,623
  36,217
  38,913
  41,715
Maintenance CAPEX, $m
  0
  -8
  -12
  -17
  -25
  -34
  -46
  -61
  -79
  -101
  -126
  -155
  -188
  -225
  -265
  -310
  -358
  -410
  -466
  -525
  -588
  -655
  -724
  -797
  -873
  -953
  -1,036
  -1,122
  -1,212
  -1,305
  -1,402
New CAPEX, $m
  -8
  -120
  -165
  -220
  -286
  -363
  -449
  -544
  -647
  -756
  -869
  -985
  -1,102
  -1,220
  -1,336
  -1,451
  -1,564
  -1,673
  -1,781
  -1,886
  -1,988
  -2,089
  -2,189
  -2,288
  -2,388
  -2,488
  -2,589
  -2,693
  -2,799
  -2,909
  -3,023
Cash from investing activities, $m
  -55
  -128
  -177
  -237
  -311
  -397
  -495
  -605
  -726
  -857
  -995
  -1,140
  -1,290
  -1,445
  -1,601
  -1,761
  -1,922
  -2,083
  -2,247
  -2,411
  -2,576
  -2,744
  -2,913
  -3,085
  -3,261
  -3,441
  -3,625
  -3,815
  -4,011
  -4,214
  -4,425
Free cash flow, $m
  93
  180
  179
  323
  516
  768
  1,088
  1,485
  1,967
  2,540
  3,211
  3,982
  4,857
  5,837
  6,922
  8,110
  9,401
  10,792
  12,281
  13,866
  15,545
  17,315
  19,175
  21,124
  23,162
  25,288
  27,503
  29,809
  32,206
  34,699
  37,290
Issuance/(repayment) of debt, $m
  -12
  66
  91
  122
  159
  201
  249
  302
  359
  419
  482
  546
  611
  677
  741
  805
  867
  928
  988
  1,046
  1,103
  1,159
  1,214
  1,269
  1,325
  1,380
  1,436
  1,494
  1,553
  1,614
  1,677
Issuance/(repurchase) of shares, $m
  -65
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -51
  66
  91
  122
  159
  201
  249
  302
  359
  419
  482
  546
  611
  677
  741
  805
  867
  928
  988
  1,046
  1,103
  1,159
  1,214
  1,269
  1,325
  1,380
  1,436
  1,494
  1,553
  1,614
  1,677
Total cash flow (excl. dividends), $m
  42
  247
  271
  445
  675
  969
  1,337
  1,787
  2,326
  2,960
  3,693
  4,529
  5,469
  6,514
  7,663
  8,915
  10,268
  11,720
  13,269
  14,912
  16,648
  18,474
  20,390
  22,394
  24,486
  26,668
  28,939
  31,302
  33,759
  36,313
  38,967
Retained Cash Flow (-), $m
  -134
  -192
  -264
  -353
  -459
  -582
  -720
  -873
  -1,037
  -1,212
  -1,393
  -1,579
  -1,768
  -1,956
  -2,143
  -2,327
  -2,508
  -2,684
  -2,856
  -3,024
  -3,189
  -3,351
  -3,511
  -3,670
  -3,829
  -3,990
  -4,152
  -4,318
  -4,489
  -4,665
  -4,848
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  55
  7
  92
  216
  387
  617
  914
  1,288
  1,748
  2,300
  2,949
  3,701
  4,558
  5,520
  6,588
  7,761
  9,036
  10,413
  11,888
  13,459
  15,123
  16,879
  18,724
  20,657
  22,678
  24,787
  26,984
  29,270
  31,648
  34,119
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  53
  6
  80
  178
  300
  448
  618
  805
  1,004
  1,206
  1,401
  1,579
  1,733
  1,853
  1,934
  1,972
  1,966
  1,918
  1,830
  1,710
  1,564
  1,400
  1,227
  1,052
  882
  723
  579
  453
  345
  257
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Stamps.com Inc. provides Internet-based postage solutions in the United States. It offers solutions for mailing and shipping various mail pieces, such as postcards, envelopes, flats, and packages using a range of United States Postal Service (USPS) mail classes, including First Class Mail, Priority Mail, Priority Mail Express, Media Mail, Parcel Select, and others. The company’s products and services comprise USPS approved PC Postage service that enables users to print electronic stamps directly onto envelopes, plain paper, or labels using personal computer, printer, and Internet connection. It also provides multi carrier shipping solutions under the ShipStation and ShipWorks brands; mailing and shipping integration solutions comprising electronic postage for transactions to partners who manage the front-end process; sells NetStamps labels, DYMO Stamp labels, shipping labels, other mailing labels, dedicated postage printers, scales, and other mailing and shipping-focused office supplies through its mailing and shipping supplies store; and Stamps.com branded insurance to insure mails or packages. In addition, the company offers PhotoStamps, a patented form of postage service, which allows consumers to turn digital photos, designs, or images into USPS-approved postages. It serves individuals, small businesses, home offices, medium-size businesses, and large enterprises. The company was formerly known as StampMaster, Inc. and changed its name to Stamps.com Inc. in December 1998. Stamps.com Inc. was founded in 1996 and is headquartered in El Segundo, California.

FINANCIAL RATIOS  of  Stamps.com (STMP)

Valuation Ratios
P/E Ratio 33
Price to Sales 6.8
Price to Book 6.6
Price to Tangible Book
Price to Cash Flow 16.7
Price to Free Cash Flow 17.7
Growth Rates
Sales Growth Rate 70.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 300%
Cap. Spend. - 3 Yr. Gr. Rate 9.9%
Financial Strength
Quick Ratio 18
Current Ratio 0.1
LT Debt to Equity 37.8%
Total Debt to Equity 39.4%
Interest Coverage 40
Management Effectiveness
Return On Assets 13.5%
Ret/ On Assets - 3 Yr. Avg. 9.7%
Return On Total Capital 16.3%
Ret/ On T. Cap. - 3 Yr. Avg. 11.5%
Return On Equity 24.5%
Return On Equity - 3 Yr. Avg. 14.1%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 82.7%
Gross Margin - 3 Yr. Avg. 79.9%
EBITDA Margin 38.2%
EBITDA Margin - 3 Yr. Avg. 19.6%
Operating Margin 33%
Oper. Margin - 3 Yr. Avg. 15.7%
Pre-Tax Margin 32.1%
Pre-Tax Margin - 3 Yr. Avg. 15.2%
Net Profit Margin 20.6%
Net Profit Margin - 3 Yr. Avg. 14.6%
Effective Tax Rate 35.9%
Eff/ Tax Rate - 3 Yr. Avg. 5%
Payout Ratio 0%

STMP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the STMP stock intrinsic value calculation we used $364 million for the last fiscal year's total revenue generated by Stamps.com. The default revenue input number comes from 2016 income statement of Stamps.com. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our STMP stock valuation model: a) initial revenue growth rate of 51.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for STMP is calculated based on our internal credit rating of Stamps.com, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Stamps.com.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of STMP stock the variable cost ratio is equal to 20.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $179 million in the base year in the intrinsic value calculation for STMP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Stamps.com.

Corporate tax rate of 27% is the nominal tax rate for Stamps.com. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the STMP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for STMP are equal to 63.9%.

Life of production assets of 41.4 years is the average useful life of capital assets used in Stamps.com operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for STMP is equal to -3.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $373 million for Stamps.com - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 16.798 million for Stamps.com is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Stamps.com at the current share price and the inputted number of shares is $2.5 billion.


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Stock chart of STMP Financial statements of STMP Annual reports of STMP
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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