2023-06-22 16:39:22 ET
Trupanion ( NASDAQ: TRUP ) stock surged 18% in Thursday after-hours trading after the pet insurance company said California approved a 12% rate increase and New York approved its request for an 18% rate increase.
The rate increase in California is less than the 28% rate it requested, according to a Stifel analyst. With those approvals, from its two largest states, Trupanion ( TRUP ) now expects to have 19.7% pricing action flowing through its book by the end of August 2023, and 21.6% pricing flowing through its book by the end of September 2023.
The company's statement came after California sent an objection letter regarding its proposed rate increase earlier this week. On Wednesday, TRUP shares sank 18% .
The company's previously issued guidance for full-year 2023, provided on May 4, 2023, didn't include the California and New York approvals. Trupanion ( TRUP ) reiterated its intent to generate positive free cash flow in Q4 2023, driven by a reduction in spend, additional operational efficiencies, and an assumption that the cost of veterinary care continues to increase 15% Y/Y.
Note that Trupanion ( TRUP ) recently had short interest of 34.97%. The SA Quant system has a Strong Sell rating on the stock.
For opposing views on the stock: SA analyst Jishan Sidhu says TRUP leads the medical pet insurance industry , while SA analyst Geoffrey Seiler calls Trupanion ( TRUP ) a high-churn, low-margin pet insurance business.
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Trupanion stock soars 19% after getting rate increases in New York, California