Trupanion, Inc. (TRUP) PT Lowered to $41 at Stifel

Stifel analyst Jonathan Block lowered the price target on Trupanion, Inc. (NASDAQ: TRUP) to $41.00 (from $44.00) while maintaining a Hold rating.

The analyst commented, "The Bulls will point to solid 4Q24 EBITDA/FCF beats, largely driven by the MLR of 70.0% (improved 270 bps y/y), which was back on track for the second consecutive quarter. Additionally, 4Q24 Subscription adjusted operating income was $36.0MM (ahead of our $34.5MME). However, these near-term figures are not what we opt to focus on, as key operating metrics such as retention and subscribers help drive the company’s long-term value. Retention missed (slightly), but the main issue continues to be the lack of subscriber growth. 4Q24 gross adds (ex-MGA) of 56.8K were down -10% y/y off a -4% comp—this is despite a PAC that inched higher. We believe Trupanion had challenges adding pets when its ARPU was $50/month. Now it is $75 and market share losses seem to be accelerating, as Trupanion struggles with lowerend plans. Trupanion’s 2021-2024 gross add CAGR was +3%, troubling for an industry supposedly only ~5% penetrated."

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