We feel now is a pretty good time to analyse Trupanion, Inc.'s (NASDAQ:TRUP) business as it appears the company may be on the cusp of a considerable accomplishment. Trupanion, Inc., together with its subsidiaries, provides medical insurance for cats and dogs on a monthly subscription basis in the United States, Canada, Puerto Rico, and Australia. With the latest financial year loss of US$45m and a trailing-twelve-month loss of US$52m, the US$1.3b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Trupanion's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.

According to the 7 industry analysts covering Trupanion, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$10m in 2026. The company is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 70% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Trupanion's growth isn't the focus of this broad overview, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there's one issue worth mentioning. Trupanion currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Trupanion's case is 45%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Trupanion which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Trupanion, take a look at Trupanion's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Historical Track Record: What has Trupanion's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Trupanion's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.