- Since we published our original coverage report SMTP, Inc.: Here Come Email Delivery Networks on May 3rd the company has continued to execute on their growth strategy and the shares have settled into a more stable trading range. (See related post for more information.)
- SMTP recently completed the acquisition of over 4,000 IP addresses that are the foundation of successful email delivery. This will allow them to support thousands of new customers.
- The company also recently contracted to build up a new datacenter with a co-location provider that will allow for further growth and delivery of higher service levels. It’s expected to be handling customer volumes in Q3 of this year.
- Social marketing and behavioral commerce trends led by companies like GroupOn and Livingsocial are adding to the already high demand for reliable email delivery services. Although message volumes are also expanding, email remains the single best common denominator for basic communication.
- We continue to see this market evolve in a similar fashion as the content delivery space and expect that over time most internet infrastructure service providers (like Amazon and Rackspace) will want to add email delivery networks to their services.
- SMTP will be reporting results for the June quarter in late July. Due to the nature of their business model we expect no surprises and a fairly smooth continuation of the growth that the company has been generating the last few quarters.
- Investors looking for a rapidly growing, profitable (27% operating margins), small capitalization internet infrastructure service provider should take a close look at SMTP.
- The company recently completed a “direct to market” IPO process and is just now accessible to pubic investors. Our intrinsic valuation (IV) remains $3 per share.
Related articles
- Eliminating a Wider Range of Your Email Headaches with SendGrid (rackspace.com)
- MIT Blackjack King Takes SMTP Public (tech.slashdot.org)
- Thunderbird Identity SMTP Problem (tenmov.es)
Comments on this entry are closed.