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Lemonade (LMND)
NYSE:LMND
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Lemonade
(NYSE:LMND)
53Neutral
Positive Factors
Business Growth
Lemonade’s execution in balancing loss ratio improvement with accelerating new business growth and expanding availability of its auto product is encouraging.
Financial Performance
Revenue grew 29% to $149 million, above the estimate.
Operational Efficiency
Encouragement comes from Lemonade’s improving underwriting, expanding product portfolio, and consistent marketing efficiency.
Negative Factors
Market Conditions
The current market conditions with tariffs, intensified competition from incumbents, and macro uncertainties pose challenges for Lemonade.
Profitability Concerns
Lemonade is still several years away from achieving GAAP net income profit, which could result in underperformance compared to other peers.
Underwriting Margins
Lemonade's underwriting margins are significantly higher than its peers, indicating continued financial losses in underwriting.
Lemonade (LMND) vs. S&P 500 (SPY)
Market Cap
$2.39B
Dividend YieldN/A
Average Volume (3M)1.81M
Price to Earnings (P/E)―
Beta (1Y)2.10
Revenue Growth21.44%
EPS Growth2.99%
CountryUS
Employees1,235
SectorFinancial
Sector Strength84
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)-0.86
Shares Outstanding73,266,170
10 Day Avg. Volume2,267,471
30 Day Avg. Volume1,811,742
Financial Highlights & Ratios
PEG Ratio-1.82
Price to Book (P/B)3.89
Price to Sales (P/S)0.00
P/FCF Ratio-113.68
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$27.86Price Target Upside-14.46% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering8
Lemonade Business Overview & Revenue Model
Company DescriptionLemonade, Inc. provides various insurance products in the United States and Europe. Its insurance products include stolen or damaged property, and personal liability that protects its customers if they are responsible for an accident or damage to another person or their property. The company also offers renters, homeowners, pet, car, and life insurance products, as well as landlord insurance policies. In addition, it operates as an agent for other insurance companies. The company was formerly known as Lemonade Group, Inc. and changed its name to Lemonade, Inc. Lemonade, Inc. was incorporated in 2015 and is headquartered in New York, New York.
How the Company Makes MoneyLemonade makes money primarily through the premiums paid by its policyholders. The company uses a flat fee model, taking a fixed percentage of the premiums to cover operational costs and profit. The remaining portion of the premiums is used to pay claims and is donated to various charitable causes chosen by the policyholders through Lemonade's Giveback program. This model is designed to minimize conflicts of interest between the company and its customers. Additionally, Lemonade collects interest income on the premiums it holds and generates revenue through reinsurance agreements, where it transfers a portion of the risk to other insurance companies. Key partnerships with reinsurers and a focus on efficient digital operations contribute significantly to Lemonade's earnings.
Lemonade Key Performance Indicators (KPIs)
Any
Customers
Shows the total number of policyholders, indicating the company’s market penetration and growth in attracting new clients.
Shows the total number of policyholders, indicating the company’s market penetration and growth in attracting new clients.
Data provided by:
Main Street Data
Main Street DataLemonade Financial Statement Overview
Summary
Lemonade is experiencing robust revenue growth, yet persistent losses and cash flow challenges highlight the need for strategic adjustments to reach profitability. The company's strong cash position and absence of debt are positives, but declining equity raises concerns about long-term financial health.Income Statement
Lemonade has demonstrated impressive revenue growth, increasing from $67.3 million in 2019 to $526.5 million in 2024. The revenue growth rate from 2023 to 2024 was approximately 22.5%, indicating strong upward momentum. However, the company has yet to achieve profitability, as evidenced by negative net income throughout the period. The gross profit margin remains strong at 100% due to the nature of their business model. Despite the positive revenue trend, the persistent net losses and negative EBIT margin reflect challenges in achieving operational efficiency.60
Neutral
Balance Sheet
Lemonade's balance sheet shows a strong cash position with cash and cash equivalents of $385.7 million as of 2024. The equity ratio is reasonable at approximately 32.1%, suggesting a balanced capital structure. However, the company has faced declining stockholders' equity over the years, with a significant decrease from $988.2 million in 2021 to $593.4 million in 2024, reflecting accumulated losses. The absence of total debt is a positive sign, indicating no leverage risk, but the reduced equity base poses a concern for financial stability.55
Neutral
Cash Flow
Lemonade has struggled with negative free cash flow, although there was an improvement from -$128.3 million in 2023 to -$20.8 million in 2024. The operating cash flow to net income ratio is negative, indicating operational cash flow challenges. The free cash flow to net income ratio also remains negative, reflecting ongoing cash outflows and the need for improvement in cash generation capabilities. Despite these challenges, the company has managed to secure financing, as evidenced by positive financing cash flows.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 526.50M | 429.80M | 256.70M | 128.40M | 94.40M | Gross Profit |
| 526.50M | 429.80M | 256.70M | 128.40M | 94.40M | EBIT |
| -203.90M | -229.80M | -294.80M | -233.60M | -120.80M | EBITDA |
| -183.90M | -209.80M | -282.60M | -229.90M | -119.10M | Net Income Common Stockholders |
| -202.20M | -236.90M | -297.80M | -241.30M | -122.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.01B | 264.50M | 1.03B | 1.07B | 577.40M | Total Assets |
| 1.85B | 1.63B | 1.69B | 1.51B | 828.70M | Total Debt |
| 107.20M | 43.10M | 35.20M | 22.30M | 0.00 | Net Debt |
| -268.80M | -221.40M | -247.30M | -248.30M | -570.80M | Total Liabilities |
| 1.26B | 924.40M | 823.90M | 522.30M | 287.70M | Stockholders Equity |
| 593.40M | 708.90M | 866.80M | 988.20M | 541.00M |
| Cash Flow | Free Cash Flow | |||
| -20.80M | -128.30M | -173.10M | -154.00M | -96.10M | Operating Cash Flow |
| -11.40M | -119.10M | -163.00M | -144.60M | -91.70M | Investing Cash Flow |
| 40.60M | 88.70M | 181.10M | -804.80M | 50.10M | Financing Cash Flow |
| 87.70M | 15.40M | 3.60M | 649.60M | 341.10M |
Lemonade Technical Analysis
Positive
32.57
Price Trends
31.01
Positive
33.11
Negative
29.10
Positive
Market Momentum
0.55
Negative
59.93
Neutral
62.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LMND, the sentiment is Positive. The current price of 32.57 is above the 20-day moving average (MA) of 29.99, above the 50-day MA of 31.01, and above the 200-day MA of 29.10, indicating a bullish trend. The MACD of 0.55 indicates Negative momentum. The RSI at 59.93 is Neutral, neither overbought nor oversold. The STOCH value of 62.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LMND.
Lemonade Risk Analysis
Lemonade disclosed 79 risk factors in its most recent earnings report. Lemonade reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lemonade Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $2.57B | 21.26 | 16.03% | ― | 25.88% | 9.45% | |
73 Outperform | $2.18B | 45.14 | 17.95% | ― | 98.66% | ― | |
69 Neutral | $1.24B | 17.00 | 8.75% | 4.33% | 19.05% | 40.69% | |
67 Neutral | $1.85B | 25.54 | 5.31% | 2.97% | 11.40% | ― | |
67 Neutral | $1.92B | 16.09 | 28.75% | 0.96% | 20.95% | 3.25% | |
64 Neutral | $12.82B | 9.83 | 7.68% | 17000.34% | 12.38% | -5.56% | |
53 Neutral | $2.39B | ― | -35.57% | ― | 21.44% | 2.99% |
* Financial Sector Average
Performance Comparison
LMND
Lemonade
32.57
15.06
86.01%
SAFT
Safety Insurance Group
83.13
7.24
9.54%
STC
Stewart Information Services
66.39
3.30
5.23%
HCI
HCI Group
166.43
65.48
64.86%
ROOT
Root
135.74
71.96
112.83%
SKWD
Skyward Specialty Insurance Group, Inc.
63.61
27.30
75.19%
Lemonade Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 8.57%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call showcased strong top-line growth, efficient cost management due to AI, and promising developments in Lemonade Car, contributing to a positive outlook. However, challenges such as the impact of the California wildfires and increased operating expenses temper the overall sentiment.Q1-2025 Updates
Positive Updates
Consistent Top-Line Growth
Q1 2025 marked the sixth consecutive quarter of accelerating top-line growth at 27% year-on-year, with no material rise in expenses except for growth spend.
AI Impact on Operating Efficiency
Over the past 10 quarters, expenses have declined in real terms while the book increased by over 65%, demonstrating AI's contribution to efficiency gains.
Lemonade Car Momentum
Lemonade Car's quarter-over-quarter IFP growth outpaced the rest of the business for the first time, with significant improvements in conversion rates and cross-sales.
Cash Position and Investment Income
Total cash, cash equivalents, and investments ended the quarter at approximately $996 million, up $69 million year-on-year, with a 26% increase in investment income.
Negative Updates
Impact of California Wildfires
The California wildfires contributed 16 percentage points to the gross loss ratio, impacting the quarter's financial results.
Increased Operating Expenses
Operating expenses, excluding loss and loss adjustment expense, increased 29% to $127 million in Q1, driven by an increase in growth spend and the impact of the FAIR plan Assessment.
Decline in Annual Dollar Retention
Annual retention decreased to 84%, a 4% drop from the previous year, partially due to efforts to improve profitability in the home book and the pay-per-mile car product.
Company Guidance
During the Lemonade Q1 2025 earnings call, the company provided several key metrics and guidance for the fiscal year. The firm reported a year-on-year growth of 27% in the first quarter, marking the sixth consecutive quarter of accelerating top-line growth. Despite the impact of the California wildfires, which contributed 16 percentage points to the gross loss ratio, the trailing 12-month gross loss ratio remained stable at 73%, with an adjusted gross profit increase of 25% year-over-year. Lemonade reiterated its expectation of achieving EBITDA breakeven by the end of 2026 and adjusted free cash flow in 2025. For Q2 2025, the company anticipates in-force premium between $1.061 billion and $1.064 billion, gross earned premium between $246 million and $248 million, and revenue between $157 million and $159 million. For the full year 2025, it expects in-force premium at December 31 of between $1.203 billion and $1.208 billion, with an adjusted EBITDA loss of between $140 million and $135 million.Lemonade Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Lemonade Resolves Data Exposure Issue in April 2025
Negative
Apr 9, 2025
On April 4, 2025, Lemonade, Inc. terminated its Warrant Agreement and Omnibus Agreement with Chewy Insurance Services, LLC, while maintaining their agency agreement. Additionally, Lemonade identified a technical issue in its car insurance quote flow that exposed certain data, including unencrypted driver’s license numbers of approximately 190,000 individuals. The company resolved the vulnerability, determined the incident was not material, and plans to notify regulators.
Spark’s Take on LMND Stock
According to Spark, TipRanks’ AI Analyst, LMND is a Neutral.
Lemonade’s stock score reflects strong revenue growth and positive earnings call sentiment, but is tempered by ongoing profitability challenges, cash flow issues, and valuation concerns. While technical indicators are neutral, the company’s strategic focus on growth and operational efficiencies could drive future improvements.
To see Spark’s full report on LMND stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.