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Here's Why You Should Add Lemonade (LMND) to Your Kitty
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Lemonade, Inc. (LMND - Free Report) should continue to gain from growth in premium placed with third-party insurance companies, interest rates on investment balances and growth in the average policy value and a robust capital position.
Growth Projections
The Zacks Consensus Estimate for Lemonade’s 2023 and 2024 earnings implies a year-over-year increase of 6.5% and 8.5%, driven by 48.4% and 24.7% higher revenues of $381.08 million and $475.05 million, respectively.
Earnings Surprise History
Lemonade has a decent surprise history. It beat earnings estimates in three of the last four quarters and missed in one, the average being 13.57%.
Zacks Rank
Lemonade currently carries a Zacks Rank #2 (Buy).
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 first quarter of 2023, Lemonade expects in-force premium between $635 million and $637 million and gross earned premium in the range of $148 million to $150 million.
LMND anticipates revenues between $87 million and $89 million.
For 2023, Lemonade expects in-force premium between $695 million and $700 million and gross earned premium in the range of $632 million to $636 million.
For 2023, revenues are expected to be in the range of $375 million to $379 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 51.1% compared with the industry’s decline of 18.4%.
James River’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 17.20%. In the past year, JRVR has lost 18.9%.
The Zacks Consensus Estimate for JRVR’s 2023 and 2024 earnings implies respective year-over-year increases of 16.2% and 13.9%.
Old Republic International’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 21.89%. In the past year, ORI has lost 6.4%.
The Zacks Consensus Estimate for ORI’s 2023 and 2024 earnings has moved 7.3% and 6.8% north, respectively, in the past 60 days.
CNO Financial’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 14.15%. In the past year, CNO has lost 13.6%.
The Zacks Consensus Estimate for CNO’s 2023 and 2024 earnings implies respective year-over-year increases of 15.4% and 7.1%.
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Here's Why You Should Add Lemonade (LMND) to Your Kitty
Lemonade, Inc. (LMND - Free Report) should continue to gain from growth in premium placed with third-party insurance companies, interest rates on investment balances and growth in the average policy value and a robust capital position.
Growth Projections
The Zacks Consensus Estimate for Lemonade’s 2023 and 2024 earnings implies a year-over-year increase of 6.5% and 8.5%, driven by 48.4% and 24.7% higher revenues of $381.08 million and $475.05 million, respectively.
Earnings Surprise History
Lemonade has a decent surprise history. It beat earnings estimates in three of the last four quarters and missed in one, the average being 13.57%.
Zacks Rank
Lemonade currently carries a Zacks Rank #2 (Buy).
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 first quarter of 2023, Lemonade expects in-force premium between $635 million and $637 million and gross earned premium in the range of $148 million to $150 million.
LMND anticipates revenues between $87 million and $89 million.
For 2023, Lemonade expects in-force premium between $695 million and $700 million and gross earned premium in the range of $632 million to $636 million.
For 2023, revenues are expected to be in the range of $375 million to $379 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 51.1% compared with the industry’s decline of 18.4%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the multi-line insurance industry are James River Group Holdings, Ltd. (JRVR - Free Report) , Old Republic International Corporation (ORI - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
James River’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 17.20%. In the past year, JRVR has lost 18.9%.
The Zacks Consensus Estimate for JRVR’s 2023 and 2024 earnings implies respective year-over-year increases of 16.2% and 13.9%.
Old Republic International’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 21.89%. In the past year, ORI has lost 6.4%.
The Zacks Consensus Estimate for ORI’s 2023 and 2024 earnings has moved 7.3% and 6.8% north, respectively, in the past 60 days.
CNO Financial’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 14.15%. In the past year, CNO has lost 13.6%.
The Zacks Consensus Estimate for CNO’s 2023 and 2024 earnings implies respective year-over-year increases of 15.4% and 7.1%.