Upstart (UPST)

Financials

MYST Advisors

No brand identity or special sauce - UPST is a lending company disguised as a tech company and will end up like other previously "high-flying" FinTech platforms (e.g. LendingClub and Lemonade). Despite a ~65% decline from highs, the stock still trades at ~65x FY22 EPS, ~8x Sales, and ~21x BV. Provides a good setup for going short with expectations high after strong 4Q21. Consensus FY23 EPS is $3.25 but could fall to $1.50 if securitization market dries up. Sees no reason for it to exist in 5 years. TP $10 (90% downside).

- 04 March, 2022

Trupanion (TRUP)

Financials

MYST Advisors

Real competition has finally arrived - will result in higher CAC and lower ARPU for TRUP. Zoetis' pet insurance offering (Pumpkin) has gained traction in the market YTD. Its ability to bundle multiple services allows ZTS to offer Wellness Programs at a superior value, while Lemonade also poses a significant threat. Estimates Pumpkin and LMND are priced ~15%-25% below comparable TRUP plans. Negative impact is already evident: unique visitors to TRUP’s websites decelerated sharply y/y in April and May; Credit card panel data shows a deceleration in spending trends for the company; Pet Acquisition Costs increased to $279 vs. $200 pre-Covid. TP $60 (48% downside).

- 23 July, 2021