Lemonade(LMND) Finbold·2024-11-24 13:08Core Viewpoint - Lemonade, Inc. has gained significant attention following its strong Q3 2024 earnings and investor day updates, leading to revised price targets from analysts reflecting both optimism and caution regarding its high-risk profile [1][4]. Financial Performance - In Q3 2024, Lemonade reported a 24% year-over-year increase in in-force premium (IFP), reaching $889 million, and a 17% rise in customer count to 2.3 million [2]. - Revenue surged 71% to $136.6 million, while gross profit increased to $38 million, representing a 27% gross profit margin [2]. - The company generated a positive net cash flow of $48 million, indicating improved financial health [2]. Loss and Risk Management - Lemonade posted a net loss of $67.7 million, or $0.95 per share, in Q3 2024, compared to a net loss of $61.5 million, or $0.88 per share, in Q3 2023 [3]. - The improved loss ratio of 81%, down from 88% last year, highlights progress in enhancing risk management capabilities [3]. Future Projections - Lemonade projects adjusted EBITDA profitability by 2026 and expects its IFP to reach $1.2 billion by FY2025 [3]. - For FY2024, the company anticipates its in-force premium to be between $940 million and $944 million, signaling continued growth momentum [3]. Analyst Price Targets - JP Morgan raised Lemonade's price target to $60 from $40, maintaining an 'Outperform' rating, citing leadership in AI adoption and scalability [5]. - BMO Capital raised its target to $15 from $13, maintaining an 'Underperform' rating, adjusting its valuation approach due to a less dilutive capital raise [5]. - Piper Sandler lifted its target to $44 from $25, retaining a Neutral rating, and noted expectations for free cash flow profitability by FY2024 and adjusted EBITDA breakeven by FY2026 [5].