Trupanion, Inc. (NASDAQ:TRUP) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a pretty great week for Trupanion, Inc. (NASDAQ:TRUP) shareholders, with its shares surging 14% to US$38.30 in the week since its latest second-quarter results. Revenues of US$315m arrived in line with expectations, although statutory losses per share were US$0.14, an impressive 24% smaller than what broker models predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Trupanion

Taking into account the latest results, the consensus forecast from Trupanion's eight analysts is for revenues of US$1.27b in 2024. This reflects a satisfactory 5.8% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 23% to US$0.35. Before this earnings announcement, the analysts had been modelling revenues of US$1.26b and losses of US$0.39 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a favorable reduction in losses per share in particular.

The average price target rose 12% to US$40.25, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Trupanion at US$50.00 per share, while the most bearish prices it at US$30.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Trupanion's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Trupanion's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% per year. So it's pretty clear that, while Trupanion's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Trupanion going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Trupanion you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.