ZACKS·2025-12-18 16:36Core Insights - InsurTech companies like Lemonade Inc. (LMND) and EverQuote Inc. (EVER) are leveraging advanced technologies but face challenges such as lower interest rates, increased competition, and inflation [1][2] Group 1: Lemonade Inc. (LMND) - Lemonade has diversified its offerings beyond renters and homeowners insurance to include auto, pet, and life insurance, which strengthens its revenue base [3] - The auto insurance segment is performing well, with in-force premiums (IFP) reaching $1.16 billion, marking eight consecutive quarters of growth, and management projects year-end IFP of $1.218 billion to $1.223 billion [4] - Lemonade's reinsurance structure helps stabilize financial performance by transferring claims costs, resulting in loss adjustment expenses averaging 7% of premiums [5] - Geographic expansion into Europe provides additional revenue opportunities and a favorable regulatory environment, although the company has yet to achieve profitability [6] - Shares of LMND have increased by 116% year to date, but its return on equity is negative at -31.9%, lagging behind industry averages [7] Group 2: EverQuote Inc. (EVER) - EverQuote is positioned for long-term growth with a focus on property and casualty insurance and a debt-free balance sheet, supported by a proprietary data platform [10][13] - The company is investing in innovation to enhance monetization and strengthen relationships with advertisers, integrating proprietary data with various tools [11] - Inorganic growth through acquisitions, such as PolicyFuel, has expanded EverQuote's product offerings and increased exposure to the $135 billion commission-based market [12] - EverQuote has authorized a $50 million share repurchase program, reflecting management's confidence in its performance [13] - Shares of EVER have also rallied 116% year to date, with a return on equity of 38.2%, outperforming the industry [13] Group 3: Financial Estimates and Valuation - The Zacks Consensus Estimate for LMND's 2025 revenues indicates a 38.6% year-over-year increase, while EPS estimates show a 17.2% increase [14] - For EVER, the 2025 revenue estimate implies a 34.8% year-over-year increase, with EPS estimates indicating a significant 65.9% increase [15] - LMND's price-to-book ratio is 11.65, significantly above its three-year median of 1.85, while EVER's ratio is 5.6, above its median of 5.26 [17] Group 4: Conclusion - Lemonade is focusing on growth through acquisitions and expanding its market presence, targeting a 30% growth in in-force premiums by 2026 [18] - EverQuote aims to sustain growth by diversifying revenue and leveraging technology to attract consumers, positioning itself strongly in the digital insurance market [19] - Based on return on equity, EVER is currently a more attractive investment compared to LMND, with a Zacks Rank of 1 for EVER and 3 for LMND [20]