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Here's Why Investing in Lemonade (LMND) Stock is Prudent Now
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Lemonade, Inc. (LMND - Free Report) remains well-poised for growth, driven by improvement in premium per customer, continued shift in the mix of underlying products toward higher value policies and instalment fees 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 15.9% and 9.7%, driven by 53.6% and 22.6% higher revenues of $394.30 million and $483.68 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 13.89%.
Zacks Rank & Price Performance
LMND currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 32.6% against the industry’s decline of 11%.
Image Source: Zacks Investment Research
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 second quarter of 2023, Lemonade expects in-force premium between $665 million and $668 million and gross earned premium in the range of $156 million to $158 million.
LMND anticipates revenues between $96 million and $98 million for the second quarter of 2023.
For 2023, the company expects in-force premium between $700 million and $705 million and gross earned premium in the range of $645 million to $650 million.
For 2023, revenues are expected to be in the range of $392-$396 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.
Other Stocks to Consider
Some other top-ranked stocks from the multi-line insurance industry are Assurant, Inc. (AIZ - Free Report) , Old Republic International Corporation (ORI - Free Report) and American International Group, Inc. (AIG - Free Report) . While Assurant and Old Republic International sport a Zacks Rank #1 (Strong Buy), American International carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Assurant’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 18.1%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 22.1% and 16.1% year-over-year growth, respectively. In the past year, the insurer has declined 24.2%.
Old Republic International’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 29.8%.
The Zacks Consensus Estimate for ORI’s 2023 and 2024 earnings has moved 9.1% and 6.4% north, respectively, in the past 60 days. In the past year, the insurer has gained 18%.
American International Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 9.22%.
The Zacks Consensus Estimate for AIG’s 2023 and 2024 earnings implies 42.6% and 20.8% year-over-year growth, respectively. In the past year, the insurer has gained 10%.
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Here's Why Investing in Lemonade (LMND) Stock is Prudent Now
Lemonade, Inc. (LMND - Free Report) remains well-poised for growth, driven by improvement in premium per customer, continued shift in the mix of underlying products toward higher value policies and instalment fees 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 15.9% and 9.7%, driven by 53.6% and 22.6% higher revenues of $394.30 million and $483.68 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 13.89%.
Zacks Rank & Price Performance
LMND currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 32.6% against the industry’s decline of 11%.
Image Source: Zacks Investment Research
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 second quarter of 2023, Lemonade expects in-force premium between $665 million and $668 million and gross earned premium in the range of $156 million to $158 million.
LMND anticipates revenues between $96 million and $98 million for the second quarter of 2023.
For 2023, the company expects in-force premium between $700 million and $705 million and gross earned premium in the range of $645 million to $650 million.
For 2023, revenues are expected to be in the range of $392-$396 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.
Other Stocks to Consider
Some other top-ranked stocks from the multi-line insurance industry are Assurant, Inc. (AIZ - Free Report) , Old Republic International Corporation (ORI - Free Report) and American International Group, Inc. (AIG - Free Report) . While Assurant and Old Republic International sport a Zacks Rank #1 (Strong Buy), American International carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Assurant’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 18.1%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 22.1% and 16.1% year-over-year growth, respectively. In the past year, the insurer has declined 24.2%.
Old Republic International’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 29.8%.
The Zacks Consensus Estimate for ORI’s 2023 and 2024 earnings has moved 9.1% and 6.4% north, respectively, in the past 60 days. In the past year, the insurer has gained 18%.
American International Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 9.22%.
The Zacks Consensus Estimate for AIG’s 2023 and 2024 earnings implies 42.6% and 20.8% year-over-year growth, respectively. In the past year, the insurer has gained 10%.