Stamps.com Inc. (STMP) shares rose more than 10% in early trading on Thursday after the company reported better-than-expected fourth quarter financial results. Revenue rose 25.1% to $132.47 million – beating consensus estimates by $12.21 million – while earnings per share of $4.68 beat consensus estimates by $1.96 per share. With its new focus on shippers, the company has realized lower churn rates and higher revenue per customer.
Earlier this month, B Riley speculated that Amazon.com, Inc. (AMZN) may be interested in acquiring Stamps.com and maintained its Buy rating with a $250.00 price target. Amazon has been gearing up to launch its own shipping service, called Shipping with Amazon, that could benefit from the sheer volume of order, inventory, shipping origin and shipping destination data collected and processed by Stamps.com. (See also: Amazon Buying Stamps.com? B Riley Makes the Case.)
From a technical standpoint, the stock broke out from upper trendline resistance and prior reaction highs at around $205.00 and briefly touched R1 resistance at $215.73 intraday on Thursday. The relative strength index (RSI) moved to slightly overbought levels of 63.0 but remains below the key 70.0 level, while the moving average convergence divergence (MACD) could see a near-term bullish crossover.
Traders should watch for some consolidation above trendline resistance following the breakout before a potential breakout from R1 resistance at $215.73. If the stock breaks out from these levels, traders could see a move to R2 resistance at $227.62. A breakdown from trendline support could lead to a move to the pivot point at $199.52 or the 50-day moving average at $190.49, although this scenario appears less likely to occur. (For more, see: The Anatomy of Trading Breakouts.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.