The tech-first insurance company delivered another round of disappointing results. Shares of Lemonade (LMND -18.21%) were leaving a bitter taste in investors' mouths today after the "insurtech" company posted another disappointing quarterly earnings report, with slowing growth and a wide loss. As a result, the stock was down 15.9% as of 11:15 a.m. ET. Lemonade is still getting squeezed Following its pandemic-era boom and bust, Lemonade stock has struggled to convince investors it can build a viable business ...

Financial Data and Key Metrics - Revenue increased by 17% YoY to $122 million in Q2 2024, driven by a 22% increase in gross earned premium, higher ceding commission rates, and a 45% increase in investment income [11] - Gross loss ratio improved to 79% in Q2 2024, down from 94% in Q2 2023, with CAT losses contributing 17 percentage points to the gross loss ratio [11] - Adjusted EBITDA loss improved by 18% YoY to $43 million in Q2 2024 [15] - In-force premium (IFP) grew 22% YoY to $839 million, while customer count increased by 14% to 2.2 million [10] - Premium per customer increased by 8% YoY to $387, driven primarily by rate increases [10] Business Line Performance - Gross loss ratio improved across all product lines, with YoY improvements ranging from 5% to 30% [12] - Homeowners insurance, particularly CAT-exposed policies, remains the most challenging segment, with the company planning to non-renew $20-25 million of IFP in the second half of 2024 to reduce CAT volatility [16][17] - The company's pet insurance product showed favorable development, contributing to the 5% favorable non-CAT prior period development [59] Market Performance - The company expanded its homeowners insurance into the UK and France, contributing to geographic diversification and reduced CAT exposure [5] - In Illinois, where all five insurance products are available, multiline customer rates are roughly double the rest of the book, with superior retention rates and high customer satisfaction [19] Strategic Direction and Industry Competition - The company is focused on reducing CAT volatility by growing products with lower CAT exposure, such as pet and renters insurance, and diversifying geographically [5] - The next-generation technology platform, codenamed L2, is expected to bring significant efficiency gains and accelerate product operations, positioning the company to adapt quickly to market changes [9] - The company aims to achieve best-in-class expense ratios, with a long-term target in the teens, driven by technology-first operational efficiencies [51][52] Management Commentary on Operating Environment and Future Outlook - Management highlighted the company's progress in reducing CAT volatility and improving loss ratios, with a trailing 12-month gross loss ratio of 79% [6] - The company expects to maintain positive cash flow consistently, except for Q4 2024, due to timing issues [6] - Management is optimistic about the auto insurance segment, citing strong customer satisfaction and the potential for cross-selling to existing renters and homeowners customers [30][31] Other Important Information - The company contributed over $2 million to 43 nonprofits globally as part of its giveback program, bringing total contributions since inception to over $10 million [7] - The company plans to hold an Investor Day on November 19, 2024, in New York City, where it will provide updates on strategic expansion plans and growth trajectory [4] Q&A Session Summary Question: Details on non-renewals of CAT-exposed home business - The non-renewals are focused on older policies written 2-4 years ago, primarily in states with higher-than-target loss ratios, and are expected to generate $50-60 million in net positive value despite a short-term impact on IFP growth [22][23] Question: Capital surplus and investment income trends - The company maintains a target premium-to-surplus ratio of 1:6 and expects cash and investment balances to remain above $900 million, with strong returns on cash investments [25][26] Question: Auto insurance expansion and margin expectations - The company plans to expand auto insurance to additional states in 2025, focusing on profitability and regulatory approval, with expectations of muted margin pressure due to cross-selling opportunities with existing customers [29][30] Question: Impact of non-renewals on loss ratio and CAT losses - The non-renewals are expected to improve the loss ratio and reduce CAT volatility, particularly in the homeowners segment, which is the most CAT-exposed part of the business [43] Question: Ceding commission trends - The ceding commission rate was 18% in Q2 2024, slightly lower than the prior year's 20%, due to a shift from a fixed to a variable structure, with expectations of some volatility quarter-to-quarter [44] Question: Premium per customer growth and rate increases - The company is approximately halfway through its rate increases, with $100 million remaining to be earned in, and expects to continue earning at a similar pace into next year [48] Question: Long-term expense ratio target - The company aims for an expense ratio in the teens at scale, driven by technology efficiencies and operational excellence, with the potential to pass some savings on to customers [51][52] Question: LTV to CAC and growth strategy - The company maintains an LTV to CAC ratio of approximately 3:1, with expectations of continued profitable growth and a focus on acquiring marginally profitable customers [60][63]

The reported revenue represents a surprise of -0.37% over the Zacks Consensus Estimate of $122.46 million. With the consensus EPS estimate being -$0.85, the EPS surprise was +4.71%. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. In force premium (end of period) Customers (end of period) : 79% compared to the 83.8% average estimate b ...

This insurance and reinsurance company is expected to post quarterly earnings of $0.69 per share in its upcoming report, which represents a year-over-year change of -10.4%. The consensus EPS estimate for the quarter has been revised 8.4% lower over the last 30 days to the current level. Fidelis Insurance Holdings' revenues are expected to be $582.19 million, up 28.5% from the year-ago quarter. One other stock from the same industry, Fidelis Insurance Holdings (FIHL) , is yet to report results for the quarte ...

· TTM gross loss ratio, a more dependable gauge of sustained changes, improved sequentially by 4 points to 79%, with an impressive 12 point improvement year on year Gross loss ratio ex-CAT continues a favorable trend, improving by 11 points . to 62% from 73% a year ago (20)% 5 Opex ($M) $250 $200 $150 $100 $50 $0 6 7 IFP, defined as the aggregate annualized premium for customers as of the period end date, increased by 22% to $838.8 million as compared to the second quarter of 2023. Annual Dollar Retention R ...

Lemonade initially only sold homeowners and renters insurance, but it expanded into the term life, pet health, and auto insurance markets after its IPO. It acquired Metromile in 2022 to accelerate the expansion of its auto insurance business. Like many other insurers, Lemonade offered discounts for customers who bundled together its plans. Lemonade's stock dropped below its IPO price as its growth slowed, it racked up persistent losses, and rising rates popped its bubbly valuation. Should contrarian investo ...

Bottom Line An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make ...

Lemonade Today Get Lemonade alerts: When claims are filed, AI analyzes photos and damage reports to automate claims assessment and expedite payouts for simple cases while kicking up more complex cases to its human adjusters. AI is used to streamline operations and offer a more efficient experience. The company also focuses on social good, which appeals to millennials and Gen-Z-ers. Lemonade's Mixed Guidance for Q2 and 2024 Upside/Downside Achieving Cash Flow Breakeven: Lemonade's Strategic Progress MarketBe ...

Lemonade (LMND) shares rallied 8.8% in the last trading session to close at $16.20. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 15% loss over the past four weeks. The insurer boasts a solid capital position. Its existing cash and cash equivalents will be sufficient to meet the working capital, liquidity and capital expenditure needs for at least the next 12 months. For Lemonade, the consensus EPS estimate ...

Here are two potentially market-beating stocks you can buy for less than the price of a large pizza. It's not easy finding quality stocks trading under $20 per share. While share price isn't the sole indicator of a stock's merits, great companies tend to trade higher over time, so they typically don't stay this inexpensive for very long. SentinelOne's enterprise value is just $4.5 billion at this depressed share price, with an enterprise-value-to- revenue ratio of just 5.5. For context, arch-rival CrowdStri ...