Shares of Lemonade Inc. (LMND) dipped 5.1% in Tuesday’s early trade after the insurance company reported a loss of $1.08 per share for the third quarter of 2021. The reported loss was, however, narrower than analysts’ expectations of a loss of $1.16 per share. The company had recorded a loss of $0.57 per share in the same quarter last year.
Revenue of $35.7 million increased 101% year-over-year and surpassed the Street’s expectations of $33.5 million. The upside was primarily due to higher gross earned premium and an increase in net investment income & commission income.
Meanwhile, In Force Premium (IFP) rose 84% year-on-year to $346.7 million at the end of the third quarter on the back of a 45% rise in customer count and a 26% increase in premium per customer.
Customer count increased 45% to 1,363,754. Premium per customer during the quarter stood at $254, up 26%. (See Lemonade stock charts on TipRanks)
For the fourth quarter, Lemonade expects to report revenue in the range of $39 million to $40 million. Also, IFP is projected to be between $380 million and $384 million.
For 2021, the company projects revenue of $126 million to $127 million against the consensus estimate of $124.3 million. LMND forecasts IFB to be between $380 million and $384 million.
Alongside earnings, Lemonade has announced its plans to acquire Metromile (MILE), a data science company focused on auto insurance, in an all-stock deal of $500 million. As per the terms, Metromile shareholders will receive Lemonade’s common shares at a ratio of 19:1.
The deal is expected to close in the second quarter of 2022, subject to necessary approvals.
Wall Street’s Take
Consensus among analysts is a Hold based on 2 Buys, 2 Holds and 1 Sell. The average Lemonade price target of $84.60 implies 35.4% upside potential.
According to the tool, the number of total unique visitors for September 2021 on all devices stood at 1.6 million, up 32.05% year-over-year. On a year-to-date basis, the number of total unique visitors to the company’s website increased 68.1% from the comparable period last year.