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Should You Buy Lemonade (LMND) Stock for Better Returns Now?
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Lemonade, Inc. (LMND - Free Report) is well-poised to gain from growth in premium placed with third-party insurance companies, interest rates on investment balances and an improvement in the average policy value.
Growth Projections
The Zacks Consensus Estimate for Lemonade’s 2023 and 2024 earnings implies a year-over-year increase of 20.9% and 16%, driven by 59.7% and 17.8% higher revenues of $410.04 million and $483.31 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 10.57%.
Zacks Rank & Price Performance
LMND currently carries a Zacks Rank #2 (Buy). In the past year, the stock has lost 45.5% against the industry’s growth of 9.1%.
Image Source: Zacks Investment Research
Business Tailwinds
Higher net added customers as well as the 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.
The 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 third quarter of 2023, Lemonade expects in-force premium between $703 million and $706 million and gross earned premium in the range of $166-$168 million.
LMND anticipates revenues between $102 million and $104 million for the third quarter of 2023.
For 2023, the company expects in-force premium between $710 million and $715 million and gross earned premium in the band of $654-$658 million.
For 2023, revenues are expected in the range of $402-$408 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.
The insurer 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.
Everest Group surpassed earnings estimates in three of the last four quarters and missed in one, the average being 17.36%.
The Zacks Consensus Estimate for Everest Group’s 2023 and 2024 earnings has moved 0.06% and 0.05% north, respectively, in the past 30 days. In the past year, the insurer has lost 51.4%.
American International earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 13.45%.
The Zacks Consensus Estimate for AIG’s 2023 and 2024 earnings implies 47.9% and 19.6% year-over-year growth, respectively. In the past year, the insurer has gained 25.7%.
MGIC Investment earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 23.59%.
The Zacks Consensus Estimate for MTG’s 2023 and 2024 earnings implies 0.5% and 6.4% year-over-year growth, respectively. In the past year, the insurer has gained 36.1%.
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Should You Buy Lemonade (LMND) Stock for Better Returns Now?
Lemonade, Inc. (LMND - Free Report) is well-poised to gain from growth in premium placed with third-party insurance companies, interest rates on investment balances and an improvement in the average policy value.
Growth Projections
The Zacks Consensus Estimate for Lemonade’s 2023 and 2024 earnings implies a year-over-year increase of 20.9% and 16%, driven by 59.7% and 17.8% higher revenues of $410.04 million and $483.31 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 10.57%.
Zacks Rank & Price Performance
LMND currently carries a Zacks Rank #2 (Buy). In the past year, the stock has lost 45.5% against the industry’s growth of 9.1%.
Image Source: Zacks Investment Research
Business Tailwinds
Higher net added customers as well as the 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.
The 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 third quarter of 2023, Lemonade expects in-force premium between $703 million and $706 million and gross earned premium in the range of $166-$168 million.
LMND anticipates revenues between $102 million and $104 million for the third quarter of 2023.
For 2023, the company expects in-force premium between $710 million and $715 million and gross earned premium in the band of $654-$658 million.
For 2023, revenues are expected in the range of $402-$408 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.
The insurer 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 Everest Group, Ltd. (EG - Free Report) , American International Group, Inc. (AIG - Free Report) and MGIC Investment Corporation (MTG - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Everest Group surpassed earnings estimates in three of the last four quarters and missed in one, the average being 17.36%.
The Zacks Consensus Estimate for Everest Group’s 2023 and 2024 earnings has moved 0.06% and 0.05% north, respectively, in the past 30 days. In the past year, the insurer has lost 51.4%.
American International earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 13.45%.
The Zacks Consensus Estimate for AIG’s 2023 and 2024 earnings implies 47.9% and 19.6% year-over-year growth, respectively. In the past year, the insurer has gained 25.7%.
MGIC Investment earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 23.59%.
The Zacks Consensus Estimate for MTG’s 2023 and 2024 earnings implies 0.5% and 6.4% year-over-year growth, respectively. In the past year, the insurer has gained 36.1%.