The WACC of Stamps.Com Inc (STMP) is 8.3%.
Range | Selected | |
Cost of equity | 7.0% - 9.5% | 8.25% |
Tax rate | 10.7% - 20.9% | 15.8% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 7.0% - 9.5% | 8.3% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 4.2% | 5.2% |
Adjusted beta | 0.91 | 1.02 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.0% | 9.5% |
Tax rate | 10.7% | 20.9% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 7.0% | 9.5% |
Selected WACC | 8.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
STMP | Stamps.Com Inc | 0 | 0.46 | 0.46 |
BZUN | Baozun Inc | 1.55 | 0.58 | 0.25 |
FTFT | Future Fintech Group Inc | 0.1 | 0.41 | 0.38 |
JMIA | Jumia Technologies AG | 0.03 | 2.15 | 2.09 |
MMYT | MakeMyTrip Ltd | 0.02 | 1.44 | 1.41 |
PBX.V | PowerBand Solutions Inc | 0.06 | -1.75 | -1.65 |
PRCH | Porch Group Inc | 0.36 | 2.47 | 1.87 |
PUBM | PubMatic Inc | 0 | 1.22 | 1.22 |
QUOT | Quotient Technology Inc | 0.13 | 0.68 | 0.61 |
SHRG | Sharing Services Global Corp | 5.77 | 0.3 | 0.05 |
Low | High | |
Unlevered beta | 0.43 | 0.85 |
Relevered beta | 0.87 | 1.03 |
Adjusted relevered beta | 0.91 | 1.02 |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for STMP:
cost_of_equity (8.25%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.91) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.