Joshua Shanker, an analyst from Bank of America Securities, reiterated the Hold rating on Trupanion (TRUP – Research Report). The associated price target is $38.00.
Joshua Shanker has given his Hold rating due to a combination of factors. Trupanion’s 3Q23 results were better than the forecasted loss, and the company managed to deliver on its goal of positive cash flow one quarter earlier than expected. This achievement was largely due to a rationalized marketing budget and an improved, but not yet fully repaired, medical loss ratio (MLR). However, the MLR is still above the targeted goal, prompting the company to push for pricing exceeding loss costs.
In addition, Trupanion has added numerous new pets to its subscription in 3Q23, but most of these were from new lower revenue, lower lifetime value products. The company is cautious about underwriting new pets in areas where pricing is not capable of earning a 30-40% IRR. Despite price increases on its flagship product, Trupanion’s subscription pet monthly persistency has slightly declined but remains strong. Lastly, while Trupanion raised its FY24E revenue and adjusted operating income guidance, which increased the price objective, Shanker would like to see more progress towards target operating margins before changing the rating.
Shanker covers the Financial sector, focusing on stocks such as Progressive, Allstate, and Renaissancere Holdings. According to TipRanks, Shanker has an average return of 7.7% and a 58.97% success rate on recommended stocks.
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Trupanion (TRUP) Company Description:
Trupanion, Inc. engages in the provision of medical insurance for cats and dogs. It operates through the following segments: Subscription Business and Other Business. The Subscription Business segment involves in the monthly subscriptions of pet medical insurance. The Others Business segment includes companies or organizations that choose to provide medical insurance for cats and dogs as a benefit to their employees or members and contracts include multiple pets. The company was founded by Darryl Rawlings in January 2000 and is headquartered in Seattle, WA.
Read More on TRUP:
- Trupanion Announces the Winners of its truFame Campaign
- Trupanion, Inc. Announces Third Quarter 2023 Earnings Release and Conference Call
- Trupanion Celebrates National Veterinary Technician Week: Honoring the Heart of Veterinary Care
- Trupanion to Participate in the Jefferies 2023 Virtual Pet Care & Wellness Conference
- Trupanion Announces Appointment of Fawwad Qureshi as Chief Financial Officer
