TRUP: Future Margin Recovery Will Support Strengthening Long Term Earnings Power

Analysts have modestly reduced their price target on Trupanion from 45.00 dollars to 42.00 dollars. This reflects more conservative assumptions for revenue growth, profit margins, and valuation multiples, despite a largely unchanged risk outlook.

What's in the News

• Updated buyback disclosure shows Trupanion repurchased no additional shares in the July to September 2025 period, while confirming completion of 95,021 shares for 5.75 million dollars under the April 2021 authorization (company filing)
• The company issued fourth quarter 2025 guidance, projecting total revenue between 371 million and 377 million dollars and subscription revenue of 258 million to 261 million dollars, which implies roughly 14 percent year over year subscription growth at the midpoint (company guidance)
• Full year 2025 guidance was raised, with total revenue now expected in a 1.433 billion to 1.439 billion dollar range and subscription revenue narrowed to 986 million to 989 million dollars, which implies about 15 percent year over year subscription growth at the midpoint (company guidance)

Valuation Changes

• Fair Value Estimate was reduced slightly from 45.00 dollars to 42.00 dollars per share, reflecting more cautious assumptions in the model.
• The Discount Rate increased modestly from 6.78 percent to 6.96 percent, indicating a slightly higher required return for investors.
• Revenue Growth was trimmed from 7.66 percent to approximately 6.52 percent, signaling a somewhat slower expected top line expansion.
• The Net Profit Margin was cut sharply from about 11.07 percent to roughly 1.12 percent, pointing to a significantly weaker long term profitability outlook.
• The Future P/E ratio was raised substantially from around 13.1 times to about 122.2 times, implying a much higher multiple on expected earnings under the revised assumptions.