🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Trupanion stock target raised, keeps neutral rating on shifting landscape

EditorNatashya Angelica
Published 06/29/2024, 01:02 AM
TRUP
-

On Friday, Piper Sandler adjusted its outlook on shares of Trupanion, Inc. (NASDAQ: NASDAQ:TRUP), a provider of medical insurance for pets, by increasing the price target to $30.00 from the previous $22.00 while maintaining a Neutral rating on the stock.

The firm's decision comes amidst a shifting landscape in the pet insurance industry, with notable market movements such as a large private insurer's withdrawal from a significant portion of the market. Piper Sandler's analysis indicates a heightened focus on the growth of Subscription pets, alongside traditional metrics like Average Revenue Per User (ARPU) and loss ratios.

The firm suggests that the market has been overly concentrated on revenue and losses, potentially overlooking the significance of market share dynamics and the total addressable market (TAM) growth for pet insurance products.

The adjustment in the stock price target reflects a change in the firm's growth rate assumption for Trupanion, from 3.5% to 4%, and a reduction in the required return rate from 13% to 11%. These changes are attributed to Trupanion's improved market positioning and its potential to secure rate adjustments.

Piper Sandler also notes the potential for an upcoming management change at Trupanion to positively influence investor sentiment. This perspective is based on the context of several missed guidance targets by the company's management in recent years.

The analyst's commentary highlights the unusual trend of significant players like Nationwide retreating from the pet insurance sector, which in their view, raises questions about the market's dynamics and Trupanion's opportunity within it. Piper Sandler's maintained Neutral rating indicates a cautious but observant stance on Trupanion's future performance in the market.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.