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.
Geoff Meacham has given his Hold rating due to a combination of factors that impact Trupanion’s current financial outlook and operational controls. The company’s earnings in the fourth quarter of 2023 surpassed expectations, with a smaller loss per share than forecasted, and a significant improvement in the subscription medical loss ratio. However, the year-end subscription pet count did not meet projections, and there were concerns about persistency rates which were slightly below the forecast. Additionally, while the revenue growth was consistent with expectations, driven by an increase in Average Revenue Per User (ARPU), the company faces challenges with substantial price hikes, which have so far seen only a minor impact on customer retention.
Moreover, Trupanion disclosed material weaknesses in financial controls related to information technology systems and financial reporting in its “Other Business” segment. This revelation could potentially aggravate short-seller activity, given the already high short interest in the stock. Despite management’s 2024 guidance mostly aligning with expectations and a strategy to improve margins, the weaknesses in financial controls and the need for more clarity following the completion of the 2023 audit lead to a cautious stance. While Meacham’s price objective suggests potential upside, the Hold rating remains in place until further information regarding the audit results and the company’s ability to address the reported material weaknesses becomes available.
According to TipRanks, Shanker is a 5-star analyst with an average return of 7.7% and a 60.87% success rate. Shanker covers the Financial sector, focusing on stocks such as Progressive, Arch Capital Group, and Axis Capital.
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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 Reports Fourth Quarter & Full Year 2023 Results
- TRUP Upcoming Earnings Report: What to Expect?
- Trupanion, Inc. Announces Fourth Quarter and Full Year 2023 Earnings Release and Conference Call
- Largest borrow rate increases among liquid names
- Trupanion Reconvenes Council on Animal Health to Provide Update on ‘Mystery’ Canine Respiratory Illness
