We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lemonade (LMND) Q1 Loss Wider Than Expected, Revenues Beat
Read MoreHide Full Article
Lemonade, Inc. (LMND - Free Report) reported first-quarter 2020 operating loss of 81 cents per share, wider than the Zacks Consensus Estimate of a loss of 76 cents. The loss was however narrower than a loss of $3.16 per share incurred in the year-ago quarter.
Gross earned premiums improved driven by increase in-force premium earned.
Total revenues declined 12.8% year over year to $24 million, primarily due to ceding commission income and increase in commission and other income. However, the top line beat the Zacks Consensus Estimate by 6.5%.
Gross earned premiums soared 84% year over year to $56 million driven by increase in in-force premium earned.
In-force premium of $252 million jumped 89% driven by higher number of customer and premium per customer. Premium per customer improved 25% year over year driven by continued shift of business mix toward products with higher average policy values, an increasing prevalence of multiple policies per customer, and growth in the overall average policy value.
Total operating expenses, excluding net loss and loss adjustment expense, increased 25% year over year to $55.1 million, attributable to higher other insurance expenses, technology development, and general and administrative expenses.
Adjusted EBITDA was negative $41.3 million, wider than negative $22.4 million in the year-ago quarter.
Loss ratio of 120 deteriorated 4800 basis points year over year.
Financial Update
Cash, cash equivalents, and investments were $1.2 billion at Mar 31, 2021, more than double from 2020 end, largely reflecting the net proceeds from the initial public offering, partially by cash used in operations.
As of Mar 31, 2021, Lemonade had assets worth $1.5 billion, up 78.3% from the level at 2020 end.
Shareholder equity at quarter end was $1.1 billion, more than double from 2020 end level.
Cash used in operations were $40.3 million, higher than $19.4 million used in the year- ago quarter.
Q2 Outlook
In-force premium at quarter end is projected between $283 and $288 million. Gross earned premium is expected in the range of $65.3-$65 million. Revenues are anticipated between $26 million and $27 million. Adjusted EBITDA loss is expected to be $40-$43 million. Capital expenditures is estimated to be $3 million.
2021 Outlook
In-force premium is projected between $376 million and $382 million (up from $372-$378 million guided earlier). Gross earned premium is expected in the range of $279 million and $283 million (up from $270 million and $275 million guided earlier). Revenues are anticipated between $117 million and $120 million (up from $114 million and $117 million guided earlier). Adjusted EBITDA loss is expected to be $163-$173 million. Capital expenditures is estimated to be $11 million (up from $8 million guided earlier).
Zacks Rank
Lemonade currently carries a Zacks Rank #4 (Sell).
Of the insurance industry players that have reported first-quarter results so far, CNO Financial (CNO - Free Report) , Assurant (AIZ - Free Report) and Old Republic International Corporation’s (ORI - Free Report) earnings beat the Zacks Consensus Estimate.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys. Access Zacks Top 10 Stocks for 2021 today >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Lemonade (LMND) Q1 Loss Wider Than Expected, Revenues Beat
Lemonade, Inc. (LMND - Free Report) reported first-quarter 2020 operating loss of 81 cents per share, wider than the Zacks Consensus Estimate of a loss of 76 cents. The loss was however narrower than a loss of $3.16 per share incurred in the year-ago quarter.
Gross earned premiums improved driven by increase in-force premium earned.
Lemonade, Inc. Price, Consensus and EPS Surprise
Lemonade, Inc. price-consensus-eps-surprise-chart | Lemonade, Inc. Quote
Behind the Q1 Headlines
Total revenues declined 12.8% year over year to $24 million, primarily due to ceding commission income and increase in commission and other income. However, the top line beat the Zacks Consensus Estimate by 6.5%.
Gross earned premiums soared 84% year over year to $56 million driven by increase in in-force premium earned.
In-force premium of $252 million jumped 89% driven by higher number of customer and premium per customer. Premium per customer improved 25% year over year driven by continued shift of business mix toward products with higher average policy values, an increasing prevalence of multiple policies per customer, and growth in the overall average policy value.
Total operating expenses, excluding net loss and loss adjustment expense, increased 25% year over year to $55.1 million, attributable to higher other insurance expenses, technology development, and general and administrative expenses.
Adjusted EBITDA was negative $41.3 million, wider than negative $22.4 million in the year-ago quarter.
Loss ratio of 120 deteriorated 4800 basis points year over year.
Financial Update
Cash, cash equivalents, and investments were $1.2 billion at Mar 31, 2021, more than double from 2020 end, largely reflecting the net proceeds from the initial public offering, partially by cash used in operations.
As of Mar 31, 2021, Lemonade had assets worth $1.5 billion, up 78.3% from the level at 2020 end.
Shareholder equity at quarter end was $1.1 billion, more than double from 2020 end level.
Cash used in operations were $40.3 million, higher than $19.4 million used in the year- ago quarter.
Q2 Outlook
In-force premium at quarter end is projected between $283 and $288 million. Gross earned premium is expected in the range of $65.3-$65 million. Revenues are anticipated between $26 million and $27 million. Adjusted EBITDA loss is expected to be $40-$43 million. Capital expenditures is estimated to be $3 million.
2021 Outlook
In-force premium is projected between $376 million and $382 million (up from $372-$378 million guided earlier). Gross earned premium is expected in the range of $279 million and $283 million (up from $270 million and $275 million guided earlier). Revenues are anticipated between $117 million and $120 million (up from $114 million and $117 million guided earlier). Adjusted EBITDA loss is expected to be $163-$173 million. Capital expenditures is estimated to be $11 million (up from $8 million guided earlier).
Zacks Rank
Lemonade currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multiline Insurers
Of the insurance industry players that have reported first-quarter results so far, CNO Financial (CNO - Free Report) , Assurant (AIZ - Free Report) and Old Republic International Corporation’s (ORI - Free Report) earnings beat the Zacks Consensus Estimate.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>