RBC Capital Starts Trupanion, Inc. (TRUP) at Outperform

RBC Capital initiated coverage on Trupanion, Inc. (NYSE: TRUP) with an Outperform rating and a price target of $14.00.

Analyst Mark S. Mahaney said, "Trupanion is a leading, independent, pet medical insurer with very attractive characteristics of a typical high-growth Internet company (large & underpenetrated addressable market, marketplace-driven network effects, recurring revenues)."

"Our $14 price target is based on P/S and EV/EBITDA at mature margin methodologies. Specifically, we apply a 3.0x multiple to our 2015 revenue of $146MM and a 20.0x multiple to our 2015 EBITDA assuming a mature market margin of 12%, which yields EBITDA of $17.6MM to reach our $14 price target. We acknowledge that these are intrinsically high multiples. Further, we believe that our target multiples are warranted given our estimated three-year revenue CAGR of 31%. Our $14 price target is also supported by our DCF methodology, which assumes a 9-year revenue CAGR of 27%, a 16% WACC, and a 4% future growth rate," he added.

For an analyst ratings summary and ratings history on Trupanion, Inc. click here. For more ratings news on Trupanion, Inc. click here.

Shares of Trupanion, Inc. closed at $10.14 yesterday.

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