Concept of pet insurance. Veterinary doctor hands with pet insurance shapes. Vet clinic and pet care concept.


Marcela Ruth Romero

Pet insurer Trupanion (NASDAQ:TRUP) stock tumbled as much as 7.7% in late Thursday morning trading after Piper Sandler analyst John Barnidge argued that Chewy’s (NYSE:CHWY) expansion of its insurance and wellness offering, CarePlus, using plans provided by Lemonade (NYSE:LMND) increases competition for TRUP.

Meanwhile, shares of pet-focused ecommerce platform Chewy (CHWY), +3.7%, and property & casualty insurer Lemonade (LMND), +2.7%, caught a bid.

The Chewy-Lemonade partnership means there will be “competition for TRUP on the Chewy shelf space, which is a negative for TRUP in our opinion as it suggests the potential for less rapid growth through the online distribution channel vs. previously & commoditization of Chewy’s shelf,” Barnidge, who views TRUP stock as a Neutral pick, wrote in a note to clients.

Recall in December 2021 when Trupanion (TRUP) teamed up with Chewy (CHWY) to roll out an array of pet health insurance and wellness plans through the latter’s platform. That was expected to be an exclusive alliance, Barnidge pointed out.

Seeking Alpha’s Quant system, meanwhile, warned investors in March that TRUP stock was at high risk of performing badly due to declining growth and its overpriced level. Since then, the stock tanked 38% to its lowest since July 2020.

In August, Piper Sandler cut Trupanion stock to Neutral on softer 2022 guidance.


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