Yahoo Finance Here's Why You Should Add Trupanion (TRUP) to Your Portfolio
Trupanion Inc. TRUP is well-poised to grow, courtesy of a heightened focus on pets’ health and well-being in an underpenetrated pet insurance market, product launches, extended operating boundaries and a solid capital position.
Zacks Rank & Price Performance
Trupanion currently carries a Zacks Rank #2 (Buy).
In the past three months period, the stock has lost 7.4% against the industry’s growth of 17.2%.
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Growth Projections
The Zacks Consensus Estimate for 2023 earnings indicates an improvement of 21.3% from the year-ago reported figure on 22% higher revenues.
The stock carries a favorable Growth Score of B. This style score analyzes the growth prospects of the company. The Growth Style Score analyzes the growth prospects of a company. Back-tested results have shown that stocks with a Growth Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Business Tailwinds
This provider of insurance for cats and dogs operates in a large but underpenetrated market. 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.
The average pet now stays with Trupanion for 78 months, not only ensuring uninterrupted revenue generation but also driving higher retention rates. The insurer has also been expanding globally, apart from strengthening its compelling portfolio. While TRUP is consolidating its presence in Japan, a couple of pending buyouts mark its foray into Europe.
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.
A strategic investment by Aflac bodes well. TRUP stated that Aflac-integrated Trupanion employee benefits products would be made available to select Aflac brokers for selling to work sites across North America.
A solid balance sheet supports investment in new product development and international expansion. Trupanion expects these investments to extend moat and expand the addressable market in the long run.
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.
Trupanion boasts being the only company in the S&P 600 to deliver revenue growth in excess of 20% per year for every year over the past decade.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Root, Inc. ROOT, Kinsale Capital Group, Inc. KNSL and First American Financial Corporation FAF, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 91.4%.
The Zacks Consensus Estimate for ROOT’s 2023 earnings indicates a year-over-year increase of 23.9%.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. In the past year, KNSL has gained 22%.
The Zacks Consensus Estimate for KNSL’s 2023 earnings implies a year-over-year rise of 22.6%.
First American has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, FAF has lost 28.6%.
The Zacks Consensus Estimate for FAF’s 2023 earnings has moved 3.9% north in the past 60 days.
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First American Financial Corporation (FAF) : Free Stock Analysis Report
Trupanion, Inc. (TRUP) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
Root, Inc. (ROOT) : Free Stock Analysis Report
