TRUP · Trupanion
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $39.39
Note written ·
Price against the kill line
12.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $39.39, on record since 11 November 2026. The shares are up 15.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $39.39, the 13 November 2025 close and the highest close of the past year, which would show the shares leading the S&P 500; fourth-quarter 2026 revenue above the $414 million top of guidance would also prove the call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 406
- Revenue, change on a year (%)
- +10.5
- Gross margin (%)
- 17.1
- Operating margin (%)
- 2.4
- Free cash flow, four quarters ($M)
- 86.7
- Net cash, cash less debt ($M)
- 292
- Enterprise value to sales (×)
- 0.8
- Enterprise value to operating income (×)
- 43.1
All filed numbers
What Trupanion reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 406 | +10.5 | 17.1 | 2.4 |
| first filed | 393 | +11.1 | 16.6 | 1.6 |
| first filed | 384 | +12.3 | 16.0 | 1.2 |
| first filed | 377 | +11.7 | 17.3 | 1.9 |
| first filed | 367 | +12.1 | 16.4 | 1.6 |
| first filed | 354 | +12.3 | 15.5 | 0.7 |
| Pre-tax income ($M) | 10.2 |
| Net income ($M) | Not reported |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.5 |
| Operating cash flow ($M) | 95.6 |
| Capital spending ($M) | 8.8 |
| Free cash flow ($M) | 86.7 |
| Cash and short-term investments ($M) | 397 |
| Debt ($M) non-current long-term debt plus current maturities | 105 |
| Net cash, cash less debt ($M) | 292 |
| Deferred revenue ($M) +3.7% on a year | 290 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | Not reported |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 399 |
| Market value ($M) | 1,492 |
| Enterprise value, market value plus net debt ($M) | 1,199 |
| Enterprise value to sales (×) | 0.8 |
| Enterprise value to operating income (×) | 43.1 |
| Price to earnings (×) | Not available |
| Price to book value (×) | 3.7 |
| Free-cash-flow yield (%) | 5.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 8.5% of shares outstanding sold short, 9.3 days of average trading to cover, −5.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $1.7M |
| 12 monthsfrom | $0 | $3.9M |
The thesis
Trupanion's third-quarter results beat guidance, but the shares already reflect them and look more likely to lag the S&P 500 than lead it over the next three months. The post-report gain faded within three sessions, and the two brokers that raised targets after the report still set them at or below the price. The fourth-quarter report, expected around February 2027, settles whether the subscription margin gain widens again.
The 5 November 2026 release topped guidance on revenue. Total revenue was $405.6 million, up 11%, against guidance of $399 million to $405 million. Subscription revenue was $287.9 million, up 14%, against guidance of $284 million to $287 million. Adjusted operating income of $47.0 million reached the top of its $44 million to $47 million range.
The outlook added less. Benzinga reported fourth-quarter revenue guidance of $407 million to $414 million against a $412.1 million consensus. Full-year revenue guidance narrowed to $1.590 billion to $1.597 billion from $1.584 billion to $1.601 billion, and the middle of the range did not move.
The market's reaction fits that reading. The shares closed at $36.75 on 6 November 2026, the first session after the report, then fell back to $34.36 on 11 November 2026, below the $34.72 close before the report. On 9 November 2026 Stifel kept a Hold rating and raised its target to $34 from $29, and Cantor Fitzgerald kept Neutral and raised its target to $33 from $30, Benzinga reported. The price already carries the margin recovery that those brokers credit.
Bullish and bearish views on Trupanion, Inc.
The bull case on Trupanion, Inc. (TRUP), in brief: pet growth picked up. The bear case: margin gain narrowed sharply.
Bull case
- Pet growth picked up. Subscription enrolled pets reached 1,145,160 at 30 September 2026, up 6% year over year, compared with 5% growth at 30 June 2026, per the company's releases.
- Subscription margin held its gain. Subscription adjusted operating income was $45.4 million in the third quarter of 2026, a 15.8% margin against 15.5% a year earlier, per the 5 November 2026 release. The second-quarter margin was 15.0%.
- Vet costs grew slower than revenue. Veterinary invoice expense rose to $287.5 million from $263.1 million in the third quarter of 2026, per the 10-Q, while revenue grew 11%.
- Retention and acquisition costs improved. Monthly average retention was 98.38% against 98.33% a year earlier, a seventh straight quarter of improvement by the company's count. Pet acquisition cost fell to $279 from $290, per the 5 November 2026 release.
- Earnings beat and cash funds buybacks. Earnings per share of $0.21 beat the $0.16 estimate, Benzinga reported on 5 November 2026. Trupanion bought 830,389 shares for $25.0 million in the quarter and held $396.8 million of cash and short-term investments against $104.5 million of debt at 30 September 2026.
- Brokers moved targets up. Stifel lifted its target to $34 and Cantor Fitzgerald to $33 on 9 November 2026, both after the report, per Benzinga.
Bear case
- Margin gain narrowed sharply. The subscription margin rose to 15.8% from 15.5% in the third quarter of 2026. In the second quarter it rose to 15.0% from 13.8%, per the company's releases.
- Guidance brackets the consensus. The $412.1 million fourth-quarter revenue consensus sits in the upper half of the $407 million to $414 million range, per Benzinga on 5 November 2026. The full-year midpoint held even though third-quarter revenue landed above its range.
- Raised targets still sit below the price. Stifel's new $34 target and Cantor Fitzgerald's new $33 target, both dated 9 November 2026, are under the $34.36 close of 11 November 2026, and both firms kept neutral ratings.
- Total pets are still shrinking. Total enrolled pets fell to 1,626,901 at 30 September 2026, down 2% year over year. The 10-Q says Trupanion and Pets Best agreed to end their relationship after the third quarter of 2028 and expects Pets Best enrollment to decline.
- Reserves moved the wrong way. The 10-Q shows unfavorable prior-year reserve development over the first nine months of 2026: $2.6 million in subscription and $1.8 million in other business.
- Insiders sold small amounts into the rally. SEC Form 4 filings show the chief operating officer sold 431 shares at $29.12 on 28 October 2026, and the chief executive sold 1,000 shares at $25.84 on 9 October 2026 under a Rule 10b5-1 plan.
Price setup
The shares closed at $34.36 on 11 November 2026, 14.0% below the 52-week intraday high of $39.97 set on 11 November 2025. The 52-week closing low was $21.46 on 3 June 2026. The 3-month change is 10.8%, from a $31.00 close on 13 August 2026.
The price sits well above both trend lines: the 50-day moving average is $27.49 and the 200-day is $26.66 as of 11 November 2026. The rise from $30.13 on 30 October 2026 to $34.72 on 5 November 2026 came before the report, with no company news in between. After the report the shares reached $36.75 on 6 November 2026 and then gave back that gain by 10 November 2026, closing at $34.26.
Benzinga reported a prospectus filed on 5 November 2026 for 3.636 million shares on behalf of selling shareholders, against 43,265,932 shares outstanding on 29 October 2026. Prospectuses from November 2020 and November 2023 covered 3,636,364 shares for Aflac, so this filing reads as a renewal of that resale registration. A prospectus supplement or an ownership filing showing an actual Aflac sale would prove that reading wrong.
Catalysts ahead
- ~11 February 2027 (est.): Fourth-quarter 2026 results; the company has not announced a date. Shows whether revenue clears the $407 million to $414 million guide, whether the subscription margin gain over the prior year widens from Q3's 0.3 points, and whether subscription pet growth holds at 6%.
What would change the view
A daily close above $39.39, the 13 November 2025 close and the highest close of the past year, which would show the shares leading the S&P 500; fourth-quarter 2026 revenue above the $414 million top of guidance would also prove the call wrong.
What it trades with
Trupanion's shares move on its own quarterly reports: the 6 November 2026 session was the largest daily move among the closes from 4 November to 11 November 2026. Its results turn on veterinary cost inflation, pet enrollment and retention, and its release does not tie them to credit conditions or interest rates. A fall alongside insurance or consumer stocks with pet growth and margin intact would be a market move, and it would leave the business case unchanged.
The evidence, claim by claim (8)
- Third-quarter 2026 total revenue was $405.6 million, up 11%; subscription revenue was $287.9 million, up 14%; earnings per share were $0.21 against a $0.16 estimate reported by Benzinga. Trupanion Q3 2026 earnings release, 8-K Exhibit 99.1; Benzinga, 5 November 2026 · as of
- Subscription adjusted operating income was $45.4 million, a 15.8% margin against 15.5% in Q3 2025; total adjusted operating income was $47.0 million. Trupanion Q3 2026 earnings release, 8-K Exhibit 99.1 · as of
- Subscription enrolled pets were 1,145,160, up 6% year over year; total enrolled pets were 1,626,901, down 2%; monthly average retention was 98.38% against 98.33% a year earlier. Trupanion Q3 2026 earnings release, 8-K Exhibit 99.1 · as of
- Fourth-quarter 2026 revenue guidance is $407 million to $414 million against a $412.1 million consensus; full-year guidance narrowed to $1.590 billion to $1.597 billion from $1.584 billion to $1.601 billion. Benzinga, Q3 2026 conference call headlines, 5 November 2026 · as of
- Stifel kept a Hold rating and raised its price target to $34 from $29; Cantor Fitzgerald kept a Neutral rating and raised its target to $33. Benzinga analyst ratings, 9 November 2026 · as of
- Trupanion repurchased 830,389 shares for $25.0 million in Q3 2026 and repaid $15.0 million of PNC revolving loan borrowings on 8 October 2026; 43,265,932 shares were outstanding on 29 October 2026. Trupanion Q3 2026 Form 10-Q · as of
- Cash and short-term investments were $396.8 million and debt was $104.5 million; free cash flow for the quarter was $28.5 million against $23.9 million a year earlier. Trupanion Q3 2026 earnings release, 8-K Exhibit 99.1 · as of
- Trupanion filed a prospectus for 3.636 million common shares on behalf of selling shareholders. Benzinga, 5 November 2026 · as of
Sources
- TRUPANION, INC. - Form 8-K - FY2026 · sec.gov
- TRUPANION, INC. - Form 10-Q - FY2026 · sec.gov
- TRUPANION, INC. - Form 8-K - FY2026 · sec.gov
- Trupanion Inc (TRUP) Reports Q3 2026 Earnings: $0.21 EPS and $405.6 Million Revenue Beat Estimates · gurufocus.com
- TRUPANION, INC. - Form S-3ASR - FY2023 · sec.gov
- TRUPANION, INC. - Form S-3ASR - FY2020 · sec.gov
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