What happened

The share price for Trupanion (TRUP 5.10%) finished the day down 10% on Thursday. It had been down as much as 10.5% at around 2:30 p.m. ET. Year to date, the stock price is down roughly 64% to $47.17.

The major indexes were down slightly on Thursday with the Dow Jones Industrial Average dropping 91 points (0.3%), the S&P 500 falling 30 points (0.8%), and the Nasdaq off 66 points (0.6%).

So what

Trupanion, a pet insurer, took a hit today due to a major deal within its industry that investors viewed negatively. Chewy, an online retailer for pet products, announced a partnership with pet insurance provider and Trupanion competitor, Lemonade. Through this partnership, Chewy will expand its suite of pet insurance and wellness offerings with new plans provided by Lemonade pet health insurance. This will enable Chewy customers to create customized plans to meet their pet insurance needs.

In December of 2021, Chewy announced a similar partnership with Trupanion to offer pet insurance to its customers. While it wasn't labeled an exclusive partnership at the time, investors may have seen it as such. But as John Barnidge, analyst at Piper Sandler points out in a note issued Thursday, this deal announced today "suggests that there will be competition for [Trupanion] on the Chewy shelf space," Barnidge said, as reported in the Fly.

The Piper Sandler analyst maintained his neutral rating for Trupanion and its $62 per-share price target.

Now what

This shouldn't have a major impact on Trupanion's growth, as it still offers insurance through Chewy, alongside Lemonade. But beyond that, the company has been growing through this downturn, just notching its 59th straight quarter where it grew revenue by more than 20% year over year. Last quarter, revenue spiked 30% year over year with a net loss of $0.33 per share.

Pet insurance is a massive, burgeoning market in the U.S., as only about 2% of pets have insurance as opposed to 25% in Great Britain, for example. Trupanion is one of the leaders in the market, so it should be able to continue its rapid growth, given the massive addressable market. 

Trupanion releases third-quarter earnings on Nov. 3, so keep an eye out for growth rates and for signs of any moves closer to profitability.