Why Trupanion’s stock fell 15.2% in September
Trupanion (NASDAQ: TRUP) had a tough September as the pet insurer’s share price fell 15.2%, according to S&P Global Market Intelligence.
It’s been a tough month across the board on Wall Street – the S&P 500 had its worst performance since March 2020, losing 4.8%, and the Nasdaq was down 5.3% – but Trupanion underperformed even those lukewarm benchmarks. The stock is currently trading at around $ 79 and was down around 34% year-to-date on Tuesday.
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September has traditionally been a bad month for the stock market, but concerns about inflation and the spread of the Delta variant haven’t helped at all.
For Trupanion in particular, the declines may have been related to its second quarter shortfall. The company reported a net loss of $ 0.23 compared, while analysts expected a net loss of $ 0.12. Additionally, CEO Darryl Rawlings sold 4,000 shares of the company on September 7. Over the next two weeks, the stock rose from around $ 91 per share to $ 80. But it should be noted that Rawlings still owns nearly a million shares of Trupanion.
And a closer look reveals a company that is pulling on all cylinders. Revenue grew 43% year-on-year to $ 168 million in the second quarter, beating estimates, and the number of pets enrolled in its insurance policies increased 37% year-on-year to a little over a million. The shortfall can be attributed to an increase in stock-based compensation, which added $ 0.11 per share to the net loss, and to an increase in depreciation and amortization, which reduced of $ 0.04 per share, explained Co-President and Chief Financial Officer Tricia Plouf during the earnings call. .
Investors shouldn’t read too much about the Trupanion faint in September. Executives buy and sell stocks for a variety of reasons, and Rawlings’ sale hasn’t been much. Sometimes these sales can scare away short-term investors, but Trupanion’s long-term view remains bright.
The company has seen 55 straight quarters of revenue growth of 20% or more, which is quite astonishing. And that’s only scratching the surface of a widely open addressable market – only about 1% of pets in the United States are covered by insurance.
She currently serves the United States and Canada, but is expanding internationally – in June, she hired Simon Wheeler to lead her international business. The global pet insurance industry is expected to grow at an annualized rate of 7.7% through 2027, and as one of the largest pet insurance companies, Trupanion is expected to benefit .
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Dave Kovaleski has no position in the stocks mentioned. The Motley Fool owns shares and recommends Trupanion. The Motley Fool has a disclosure policy.
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