Trupanion, Inc.'s (NASDAQ:TRUP): Trupanion, Inc., together with its subsidiaries, provides medical insurance for cats and dogs on monthly subscription basis in the United States, Canada, and Puerto Rico. With the latest financial year loss of -US$927.0k and a trailing-twelve month of -US$2.3m, the US$851m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which TRUP will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for TRUP.
According to the 8 industry analysts covering TRUP, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$2.3m in 2020. So, TRUP is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which TRUP must grow year-on-year. It turns out an average annual growth rate of 72% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of TRUP’s upcoming projects, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. TRUP has managed its capital judiciously, with debt making up 15% of equity. This means that TRUP has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on TRUP, so if you are interested in understanding the company at a deeper level, take a look at TRUP’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further examine:
- Historical Track Record: What has TRUP's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Trupanion’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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