Shares of Lemonade (NYSE:LMND) are down nearly 3% in pre-open Tuesday despite the company reporting better-than-expected Q1 revenue.
LMND reported a loss per share of $1.21 in the period, compared to a loss per share of 81 in the same period last year. Revenue came in at $44.3 million, up 89% YoY and above the analyst expectations of $43.3 million.
The number of customers in the quarter totaled 1.5 million, in line with the consensus estimates. In-force premium stood at $419 million compared to the analyst consensus of $408 million.
LMND reported an adjusted EBITDA loss of $57.4 million, up 39% YoY, compared to the consensus projection of $66.7 million. The gross loss ratio stood at 90% in the period, compared to the estimated 85.1%. The net loss ratio was 89%, while analysts were expecting 79.8%.
Barclays analyst Tracy Benguigui commented:
“Slightly improved '22 guidance (ex MILE). LMND beat its 1Q22 guide provided last quarter despite a disappointing 90% gross loss ratio. Comparing results to the same quarter last year is a low bar given TX winter storms in 1Q21,” Benguigui said in a client note.
BofA analyst Joshua Shanker is more pessimistic as he lowered the price target to $19.00 per share, down from the prior $21.00, while reiterating an Underperform rating.
“While the stock has been on a long downward performance leg, we believe there is likely floor support around the $700-800mn price level. Upside risk would come from the company demonstrating profitable growth in future quarters. Downside risk comes from the passage of time without a capital raise through 2H23. No material upside in a high risk stock like LMND forms the basis of our Underperform rating,” Shanker told clients.
By Senad Karaahmetovic