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Should You Retain Lemonade (LMND) Stock in Your Portfolio?
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Lemonade, Inc. (LMND - Free Report) has been gaining momentum on the back of improvement in premium per customer, continued shift in the mix of underlying products toward higher value policies, higher instalment fees and a robust capital position.
Earnings Surprise History
Lemonade has a decent surprise history. It beat earnings estimates in two of the last four quarters and missed in other two.
Zacks Rank
Lemonade currently carries a Zacks Rank #3 (Hold).
Business Tailwinds
Higher net added customers as well as expansion of geographic footprint and product offerings are likely to boost gross written premium.
In-force premium is likely to have been aided by an increase in customer base as well as an improvement in premium per customer.
Higher prevalence of multiple policies per customer, growth in the overall average policy value and continued shift in the mix of underlying products toward higher value policies are likely to drive premium per customer year.
For the fourth quarter of 2022, Lemonade expects in-force premium between $612 million and $615 million and gross earned premium in the range of $147 million to $150 million.
LMND anticipates revenues between $77 million and $80 million.
For 2022, Lemonade expects in-force premium between $612 million and $615 million and gross earned premium in the range of $486 million to $489 million.
For 2022, revenues are expected to be in the range of $245 million to $248 million.
Interest rates on investment balances and lower investment expenses are likely to drive net investment income.
Commission and Other Income is expected to increase on the back of growth on premium placed with third-party insurance companies and higher installment fees billed.
Lemonade boasts a solid capital position. Its existing cash and cash equivalents will be sufficient to meet working capital needs and capital expenditure over at least the next 12 months.
Price Performance
In the past year, the stock has lost 62.3% against the industry’s growth of 3.9%.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average being 36.34%. In the past year, MGIC Investment has lost 10.5%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 12.1% and 0.4% north, respectively, in the past 30 days.
Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.
The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 30 days. In the past year, the insurer has lost 12.5%.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 8.2%.
The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 4.4% and 3.8% north, respectively, in the past 30 days.
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Should You Retain Lemonade (LMND) Stock in Your Portfolio?
Lemonade, Inc. (LMND - Free Report) has been gaining momentum on the back of improvement in premium per customer, continued shift in the mix of underlying products toward higher value policies, higher instalment fees and a robust capital position.
Earnings Surprise History
Lemonade has a decent surprise history. It beat earnings estimates in two of the last four quarters and missed in other two.
Zacks Rank
Lemonade currently carries a Zacks Rank #3 (Hold).
Business Tailwinds
Higher net added customers as well as expansion of geographic footprint and product offerings are likely to boost gross written premium.
In-force premium is likely to have been aided by an increase in customer base as well as an improvement in premium per customer.
Higher prevalence of multiple policies per customer, growth in the overall average policy value and continued shift in the mix of underlying products toward higher value policies are likely to drive premium per customer year.
For the fourth quarter of 2022, Lemonade expects in-force premium between $612 million and $615 million and gross earned premium in the range of $147 million to $150 million.
LMND anticipates revenues between $77 million and $80 million.
For 2022, Lemonade expects in-force premium between $612 million and $615 million and gross earned premium in the range of $486 million to $489 million.
For 2022, revenues are expected to be in the range of $245 million to $248 million.
Interest rates on investment balances and lower investment expenses are likely to drive net investment income.
Commission and Other Income is expected to increase on the back of growth on premium placed with third-party insurance companies and higher installment fees billed.
Lemonade boasts a solid capital position. Its existing cash and cash equivalents will be sufficient to meet working capital needs and capital expenditure over at least the next 12 months.
Price Performance
In the past year, the stock has lost 62.3% against the industry’s growth of 3.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are MGIC Investment Corporation (MTG - Free Report) , Radian Group Inc. (RDN - Free Report) and Allianz SE (ALIZY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average being 36.34%. In the past year, MGIC Investment has lost 10.5%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 12.1% and 0.4% north, respectively, in the past 30 days.
Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.
The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 30 days. In the past year, the insurer has lost 12.5%.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 8.2%.
The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 4.4% and 3.8% north, respectively, in the past 30 days.