Key Stats for Trupanion Stock
- Price Change: -13.0%
- Current Price: ~$28
- Analyst Median Target: ~$44
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What Happened?
Trupanion (TRUP) shares crashed 13.0% this week, closing at $27.99, after the pet insurance leader reported disappointing fourth-quarter earnings.
The company posted earnings per share (EPS) of $0.13, which missed the analyst consensus of $0.16.
While revenue grew 12% to $376.9 million, investors were spooked by a sharp rise in the cost of growth.
The primary concern was the efficiency of their marketing spend.
According to the company’s Investor Relations filings, the average pet acquisition cost (PAC) surged to $320, up significantly from $261 in the prior year.
This means Trupanion is spending roughly 23% more to acquire each new customer, outpacing its 12% revenue growth.
Furthermore, fears of “veterinary inflation” continue to weigh on the stock.
In their latest 8-K filing, management noted that they “haven’t seen a significant abatement of inflation,” raising concerns that rising vet bills will continue to pressure margins even as the company raises premiums.
This dynamic was a key topic in their earnings webcast, where analysts questioned the sustainability of their current pricing power.
See analysts’ growth forecasts and price targets for ITrupanion stock (It’s free!) >>>
Is Trupanion Undervalued Today?
Based on current analyst consensus, the market’s reaction appears to be an overcorrection.
The Street Target Price (Median) for Trupanion currently sits at $43.50, implying a potential 55.4% upside from current levels.
Despite the “miss,” the core business is showing signs of strength that the headline numbers obscure.
CEO Margi Tooth highlighted that “retention improved in every single quarter” of 2025, a critical metric for long-term profitability.
High retention means that once Trupanion pays that $320 to acquire a pet, they keep the customer for longer, increasing the “Lifetime Value” (LTV) of that pet.
Management explicitly stated that they are “leaning further into new pet acquisition” because they are confident in this higher LTV.
If Trupanion can demonstrate that it can acquire new “furry members” more efficiently in 2026, analysts believe the valuation gap could close rapidly.
Read the full Trupanion Transcript on TIKR to see the Retention Strategy >>>
Valuation Deep Dive
The current analyst outlook identifies a significant dislocation between Trupanion’s share price and its long-term intrinsic value.
- Analyst Median Target: $43.50
- Current Price: $27.99
- Implied Total Return: 55.4%
The “LTV” Moat: The market is punishing TRUP for spending money to grow, but the model rewards it. By locking in over 1 million subscription pets with industry-leading retention rates, Trupanion is building a recurring revenue engine that becomes incredibly profitable as the portfolio matures.
Cash Flow Turnaround: A key positive often missed is the cash flow. Free cash flow grew 95% year-over-year to $75.4 million. This surging cash generation gives the company a buffer to navigate inflationary periods without needing to raise dilutive capital, supporting the bullish long-term thesis.
Conclusion: A high-risk, high-reward bargain. With the stock beaten down to $28 and a projected 143% upside, Trupanion is a battleground stock. But for investors who believe pet parents will keep paying for their furry family members, the disconnect between the share price and the underlying cash flow creates a rare opportunity.
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How Much Upside Does Trupanion Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
