Lemonade (LMND) AI Stock Analysis

• Market Cap: $4.41B
• Dividend Yield: N/A
• Average Volume (3M): 2.49M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.05
• Revenue Growth: 22.91%
• EPS Growth: 4.95%
• Country: US
• Employees: 1,235
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): -0.60
• Shares Outstanding: 73,886,410
• 10 Day Avg. Volume: 2,787,499
• 30 Day Avg. Volume: 2,490,541
• PEG Ratio: 0.80
• Price to Book (P/B): 4.39
• Price to Sales (P/S): 4.95
• P/FCF Ratio: -125.25
• Enterprise Value/Market Cap: 0.76
• Enterprise Value/Revenue: 5.59
• Enterprise Value/Gross Profit: 14.03
• Enterprise Value/Ebitda: -17.82
• 1Y Price Target: $44.67
• Price Target Upside: -16.40% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 8

• Rating: 55 Neutral
• Price Target: $61.00 ▲(14.17% Upside)

Lemonade's overall stock score reflects a company with strong growth potential but significant profitability challenges. The earnings call provided positive insights into growth and operational improvements, but financial performance and valuation concerns weigh heavily. Technical indicators suggest some positive momentum, but caution is advised due to valuation and profitability issues.

Positive Factors

Revenue Growth

Consistent IFP growth indicates strong market demand and effective business strategies, supporting long-term revenue expansion.

Cash Flow Improvement

Significant improvement in cash flow enhances financial flexibility, enabling further investment in growth and innovation.

European Market Expansion

Rapid growth in the European market diversifies revenue streams and strengthens Lemonade's global market position.

Negative Factors

Profitability Concerns

Ongoing operational losses and negative margins indicate the need for improved cost management and efficiency to achieve profitability.

Increased Leverage

Rising leverage can strain financial stability, potentially limiting the company's ability to invest in growth opportunities.

Marketing Expenses

High marketing costs may pressure margins and profitability, necessitating effective cost management to sustain growth.

Lemonade Business Overview & Revenue Model

Company Description

Lemonade, 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 Money

Lemonade generates revenue primarily through the sale of insurance premiums from its various products, including renters, homeowners, and pet insurance. The company uses a subscription-based model where customers pay monthly premiums to maintain their coverage. Key revenue streams include the collection of premiums, which are then pooled together to pay for claims. Additionally, Lemonade retains a fixed percentage of the premiums as revenue, while the remainder is allocated to reinsurance and claims. The company has also established partnerships with various reinsurance companies to mitigate risk and ensure financial stability. These partnerships help Lemonade manage its claims and maintain profitability. The company’s unique business model, which includes the Giveback program, positions it favorably in the market, appealing to socially conscious consumers, which can further drive customer acquisition and retention.

Lemonade Financial Statement Overview

Summary

Lemonade's financial performance is mixed. While revenue growth is positive, profitability remains a challenge with negative net profit and EBIT margins. The balance sheet is stable but shows increasing leverage and negative returns on equity. Cash flow management needs improvement, highlighting the need for better operational efficiency.

Income Statement

Lemonade's income statement shows a mixed performance. The company has achieved a revenue growth rate of 7.54% in the TTM, indicating positive momentum. However, profitability remains a challenge with negative net profit and EBIT margins, reflecting ongoing operational losses. The gross profit margin has improved to 39.87%, suggesting better cost management, but the overall negative margins highlight the need for further efficiency improvements.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio has increased to 0.27, indicating a rise in leverage, but it remains at a manageable level. The return on equity is negative, showing that the company is not currently generating returns for shareholders. The equity ratio of 27.24% suggests a stable capital structure, but the negative ROE highlights profitability concerns.

Cash Flow

Cash flow analysis reveals challenges in cash generation. The free cash flow growth rate is negative, indicating a decline in cash reserves. The operating cash flow to net income ratio is zero, reflecting insufficient cash flow to cover net losses. However, the free cash flow to net income ratio is positive, suggesting some ability to manage cash relative to net losses. Overall, cash flow management needs improvement to support business operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	600.70M	526.50M	429.80M	256.70M	128.40M	94.40M
Gross Profit	239.50M	172.70M	90.20M	28.40M	22.90M	20.40M
EBITDA	-188.60M	-183.90M	-209.80M	-282.60M	-229.90M	-119.10M
Net Income	-204.00M	-202.20M	-236.90M	-297.80M	-241.30M	-122.30M
Balance Sheet
Total Assets	1.93B	1.85B	1.63B	1.69B	1.51B	828.70M
Cash, Cash Equivalents and Short-Term Investments	670.30M	1.01B	264.50M	1.03B	1.07B	577.40M
Total Debt	143.70M	107.20M	43.10M	35.20M	22.30M	0.00
Total Liabilities	1.41B	1.26B	924.40M	823.90M	522.30M	287.70M
Stockholders Equity	527.10M	593.40M	708.90M	866.80M	988.20M	541.00M
Cash Flow
Free Cash Flow	-21.40M	-20.80M	-128.30M	-173.10M	-154.00M	-96.10M
Operating Cash Flow	-11.60M	-11.40M	-119.10M	-163.00M	-144.60M	-91.70M
Investing Cash Flow	-62.40M	40.60M	88.70M	181.10M	-804.80M	50.10M
Financing Cash Flow	102.70M	87.70M	15.40M	3.60M	649.60M	341.10M

Lemonade Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 53.43
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LMND, the sentiment is Neutral. The current price of 53.43 is below the 20-day moving average (MA) of 53.98, above the 50-day MA of 49.98, and above the 200-day MA of 38.95, indicating a neutral trend. The MACD of 1.82 indicates Negative momentum. The RSI at 49.26 is Neutral, neither overbought nor oversold. The STOCH value of 59.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LMND.

Lemonade Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLMR	83 Outperform	3.13B	20.58	―	―	52.60%	50.69%
STC	77 Outperform	2.08B	23.84	6.11%	2.73%	14.00%	100.44%
ROOT	68 Neutral	1.44B	19.64	34.89%	―	59.76%	―
AHL	62 Neutral	3.35B	―	14.42%	―	―	―
KMPR	58 Neutral	3.25B	9.70	―	2.45%	2.75%	572.22%
LMND	55 Neutral	$4.41B	―	-35.10%	―	22.91%	4.95%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%