Trupanion has gotten torched over the last six months - since December 2025, its stock price has dropped 33.3% to $25.47 per share. This may have investors wondering how to approach the situation.
Is now the time to buy Trupanion, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Trupanion Not Exciting?
Despite the more favorable entry price, we’re sitting this one out for now. Here are three reasons we avoid TRUP, plus one stock we’d rather own.
1. Substandard BVPS Growth Indicates Limited Asset Expansion
Book value per share (BVPS) serves as a key indicator of an insurer’s financial stability, reflecting a company’s ability to maintain adequate capital levels and meet its long-term obligations to policyholders.
Disappointingly for investors, Trupanion’s BVPS grew at a mediocre 11.9% annual clip over the last two years.
2. Projected BVPS Growth Is Slim
The key to book value per share (BVPS) growth is an insurer’s ability to earn underwriting profits while generating strong returns on its float - Warren Buffet’s secret sauce.
Over the next 12 months, Consensus estimates call for Trupanion’s BVPS to grow by 3.4% to $8.82, lousy growth rate.
3. Previous Growth Initiatives Have Lost Money
Return on equity, or ROE, represents the ultimate measure of an insurer’s effectiveness, quantifying how well it transforms shareholder investments into profits. Over the long term, insurance companies with robust ROE metrics typically deliver superior shareholder returns through a balanced approach to capital management.
Over the last five years, Trupanion has averaged an ROE of negative 6.5%, a bad result not only in absolute terms but also relative to the majority of insurers putting up 20%+. It also shows that Trupanion has little to no competitive moat.
Final Judgment
Trupanion’s business quality ultimately falls short of our standards. Following the recent decline, the stock trades at 2.6× forward P/B (or $25.47 per share). Beauty is in the eye of the beholder, but we don’t really see a big opportunity at the moment. We’re pretty confident there are superior stocks to buy right now. Let us point you toward a fast-growing restaurant franchise with an A+ ranch dressing sauce.
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