Trupanion (TRUP) shares soared 5.8% in the last trading session to close at $25.35. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.2% gain over the past four weeks.
This pet insurer is well-poised to grow, courtesy of its heightened focus on pets’ health and well-being in an underpenetrated pet insurance market, product launches, extended operating boundaries and a solid capital position.
Average monthly retention continues to remain strong, coupled with an increase in total enrolled subscription pets and average revenue per unit (ARPU). This, in turn, has been driving mid-teens revenue growth. The cost of veterinary care continues to rise, outpacing consumer discretionary income, as noted by management. The role of pricing, thus, plays an important part, both in keeping the growth pace alive and comforting pet parents.
The insurer has also been expanding globally as part of its five-year growth plan, apart from strengthening its compelling portfolio. TRUP noticed increasing contributions from European endeavors. Given the underpenetrated market, it sees opportunities to enroll more pets with increasing acquisition spend.
A solid capital position, aided by operational strength, supports investment in new product development and international expansion. Trupanion expects these investments to extend its moat and expand the addressable market in the long run.
This provider of medical insurance covering cats and dogs is expected to post quarterly earnings of $0.11 per share in its upcoming report, which represents a year-over-year change of -50%. Revenues are expected to be $389.65 million, up 10.2% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and 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 belongs to the Zacks Insurance - Accident and Health industry. Another stock from the same industry, Aflac (AFL), closed the last trading session 1.6% higher at $120.15. Over the past month, AFL has returned 5%.
For Aflac, the consensus EPS estimate for the upcoming report has changed +0.1% over the past month to $1.78. This represents no change from what the company reported a year ago. Aflac currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).