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$TRUP Earnings: What I'm Looking For
$TRUP reports earnings this afternoon. I'm cautiously bullish, having first bought shares in April 2020 at $30.20/sh and having bought shares 3 more times, each at a higher per share price (most recently August 2021 at $93.18. I'm currently up ~43%. All the metrics and KPIs remain strong. However, the average pet acquisition cost (PAC) has increased dramatically.

In 2019, the lifetime value of a pet (LVP) grew 16.5% while average PAC grew 19.4%. 2020 saw LVP grow 24.9% and average PAC grew 22.5%. 2021 was 9.8% and 12.5%. The silver lining is the increased average PAC has thankfully resulted in accelerating growth in total pets enrolled (up 36.4% to 1,176,000 in 2021) and total subscription pets enrolled (up 21.9% to 704,333 in 2021). On top of that, average monthly retention continued to strengthen in 2021, up 3bps over 2020 to 98.74%. Looking back to a more "normal" (non-COVID) year, 2021 was a 16bps increase.

Here's what I'm looking for in today's earnings:

  • Solid growth in LVP, total and total subscription pets enrolled, and average monthly retention while average PAC remains reasonable.
  • >35% revenue growth over Q1'21.
  • They were barely FCF negative in 2021 while previous years were barely positive. I'm not too concerned about barely negative FCF but don't let that become a big negative.
  • Management guidance would be nice along with some updates on how the partnership with $CHWY is going.
"The Market" Stock Pitching Game: January 14th lineup
This Friday, January 14th at 12:00pm EST, come watch "The Market" — a stock pitching game with live audience participation held over Zoom.

Sign up to get the Zoom link HERE

Audience members get to ask questions of the contestants and vote to decide the best pitch of the night.

What is the best investment idea of the month? The Market will decide!

We have an awesome lineup of pitchers:

Kris — From Growth to Value: $FVRR
Simon Erickson — 7investing: $TRUP
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This is a great idea and sounds like fun! So many cool things developing in the world of retail investing.
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