Is Stamps.com Inc. (STMP) Destined for Greatness?

The United States Postal Service may be limping toward extinction, but postage itself is hardly a dying business. Investors might have worried that demand would soften along with the USPS decline, but the results above show anything but. Stamps.com’s PC postage business earned a record $30.3 million in its latest quarter — a 16% gain over the prior year. Stamps.com also hit its highest-ever level of paid customers and added 92,000 small businesses to its roster this quarter, giving investors plenty of good vibes about the company’s prospects going forward. High-volume shipping orders also rose by 74% from last year. However, volume through Amazon.com, Inc. (NASDAQ:AMZN) was down again, and this continues to be a drag on growth.

Enterprise-level growth grew 53% year over year and shows no signs of slowing. Stamps.com particularly wanted to attract small to medium-size business customers and boosted marketing spend by double digits to appeal to such customers in 2012. That effort seems to have paid off. Stamps.com seems to be effectively scaling its marketing expenses, which is important given the relatively tight nature of this business. Though it increased its acquisition spend, the number dropped on a per-acquisition basis, which has led to a record quarterly small business addition total. According to the National Federation of Independent Business, small businesses still feel less confident about the economy than they used to. If confidence picks up, investors might expect even better growth from Stamps.com Inc. (NASDAQ:STMP)’s small business segment.

Putting the pieces together
Today, Stamps.com has some of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Stamps.com Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com.

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