TRUP - Is This Beaten-Down Growth Stock a Buy?
With inflation hovering near multi-decade highs, financial markets are in turmoil. Market traders are worried several more Fed Fund rate hikes from the Federal Reserve will be needed to get inflation back under control. Interest rate hikes aren't good news for growth stocks that benefit from lower rates. There's also real worry that rising interest rates will harm the U.S. economy enough to send it into a full-blown recession.
Given this unfortunate news, it's not terribly surprising that the growth stock-oriented Nasdaq Composite is down 30% from its all-time high (set last November). Nor is it surprising that the stock of the pet health insurer Trupanion (NASDAQ: TRUP) is also taking a hit for many of the same reasons.
What some investors are wondering though is whether Trupanion stock's 60% price drop from its all-time high is an overreaction, considering the financial metrics for the company. More importantly, has this recent weakness in Trupanion's stock made it a buy for growth investors? Let's take a closer look and see if we can come up with an answer.
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Is This Beaten-Down Growth Stock a Buy?