Trupanion was a lot closer to analysts' target earlier this year. However, the company reported mixed fourth-quarter results in early February and said that its spending would increase in 2021 on pre-revenue initiatives. That update combined with a market rotation away from growth stocks caused Trupanion's shares to plunge more than 35%.
However, the growth prospects for Trupanion are still very good. Pet ownership is increasing. The U.S. and Canadian pet medical insurance markets are greatly underpenetrated. Trupanion expects its subscription revenue to jump around 25% this year.
Beyond 2021, Trupanion's relationship with Aflac could
begin to pay off. The big supplemental insurance company bought nearly
10% of Trupanion last year. Aflac plans to offer Trupanion's pet
insurance to large and medium-sized businesses beginning in 2022 and
subsequently expand into the small business market. This stock shouldn't
remain beaten down for much longer.