2023-06-21 09:38:48 ET
- Trupanion ( NASDAQ: TRUP ) fell 12% as California on Tuesday sent an objection letter on the pet insurance company's proposed rate increase.
- California is cutting the pending rate increase to 12.6% from the 28% rate that Trupanion ( TRUP ) requested, according to Stifel analyst Jonathan D. Block.
- "The balance sheet is clearly under pressure, and questions of potential financing needs are pressing for Trupanion; and with the loss ratio continuing to run hot, a (much) lower-than-expected California rate increase is a material blow to rightsizing the loss ratio, in our opinion," Block, who has a hold rating on TRUP, wrote in a note on Wednesday.
- A New York proposed rate increase remains outstanding, according to Block, who has a $25 price target on Trupanion ( TRUP ).
- "Altogether, we view this as a net-negative for Trupanion as balance sheet uncertainty increases following this outcome in California, all while veterinary inflation remains persistent," Stifel's Block wrote.
- Trupanion's ( TRUP ) short interest is 35%.
For further details see:
Trupanion drops amid California objection to rate increase