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Trupanion, Inc. (NASDAQ:TRUP): Is Breakeven Near?

Simply Wall St

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.

View our latest analysis for Trupanion

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.

NasdaqGM:TRUP Past and Future Earnings, August 22nd 2019

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.

Next Steps:

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:

  1. 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.
  2. 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.
  3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.