Trupanion (TRUP) Moves 9.9% Higher: Will This Strength Last?
Trupanion (TRUP) shares ended the last trading session 9.9% higher at $22.60. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.4% loss over the past four weeks.
Heightened focus on pets’ health and well-being in an underpenetrated pet insurance market, product launches, extended operating boundaries and a solid capital position should continue to drive TRUP.
With a change in the attitude of pet owners who are increasingly focusing on pets’ health and well-being, TRUP is poised well for growth in a total addressable market worth $34.1 billion. This pet insurer continues to invest in areas where we believe we can achieve high internal rates of return. Improving pricing should add to the upside. TRUP estimates a 15% adjusted operating margin, banking on improved pricing.
Trupanion remains focused on growing its addressable market by 40% by 2025 end by adding 10,000 international hospitals. This will increase its overall market from 25,000 in North America to 35,000 globally. While doing so, it anticipates expanding its active hospital base.
TRUP believes that if it can reach its five-year target, its revenues may grow to more than $1.5 billion. It may reach over 3.5 million pets and deliver growth in the intrinsic value of over 25% per year.
This provider of medical insurance covering cats and dogs is expected to post quarterly loss of $0.41 per share in its upcoming report, which represents a year-over-year change of -24.2%. Revenues are expected to be $262.44 million, up 19.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Trupanion, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TRUP going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Trupanion is a member of the Zacks Insurance - Accident and Health industry. One other stock in the same industry, Employers Holdings (EIG), finished the last trading session 1.3% lower at $36.71. EIG has returned 2.1% over the past month.
Employers Holdings' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.90. Compared to the company's year-ago EPS, this represents a change of +13.9%. Employers Holdings currently boasts a Zacks Rank of #2 (Buy).
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