From Standard & Poor's Equity Research
Needham downgraded Stamps.com (STMP) to hold from buy.
Analyst Mark May says the recently launched stamp offering from the Dymo/Endicia alliance (called Dymo Stamps) could create disruption for Stamps.com's core service. He says he also does not expect material upside in the near term from the company's PhotoStamps product. As a result of the former, he lowers his 73 cents 2006 earnings per share (EPS) estimate to 72 cents and his 89 cents 2007 estimate to 83 cents. He also assumes a lower valuation multiple. He still views Stamps.com as a compelling play on growth of Internet-enabled business services, but he would stay on the sidelines for now.