Since reaching an all-time high back on June 18th of this year, Stamps.com (STMP) has broken its uptrend and moved straight down. As it currently stands, the stock is down 41.5% from its high. STMP is another name that has seen fantastic growth the past few years, but after hitting highs earlier this year, it has given up all of its momentum. The company has consistently reported strong quarters over the years with the last revenue or EPS miss happening back in Q2 of 2014.

So why has it gotten crushed despite seemingly solid earnings? Traders seem to be focused more on a slowdown in margins and political risks that come with the company. Over the past several quarters, despite strong headline numbers, gross margins have steadily slowed from higher cost of revenues. So the headline earnings reports essentially are being taken with a grain of salt.

Being so closely connected with the United States Postal Service, the company announced contract re-negotiations back in August that stoked investor concerns. Essentially, large parts of the business rely on USPS approval, and the results of negotiations determine some of the fixed costs and pricing of the company. For 2019, the USPS has proposed price increases around 10%. According to the company, these may not necessarily harm the company, but investors seem to disagree.

In addition, on the political front, the United States’s potential withdrawal from the Universal Postal Union, which is an agreement that coordinates postal policies internationally, would further complicate the business, although again, in its most recent earnings report the company does not see withdrawal as a headwind seeing as most of the company’s customers interact within the United States. At the end of the day, STMP has seen tremendous growth over the past few years, but the innards of their earnings reports and political concerns have become a major headwind, not so much within the company, but in the market, and the market determines the price.