Back to top

Image: Bigstock

Lemonade (LMND) Soars 15.6%: Is Further Upside Left in the Stock?

Read MoreHide Full Article

Lemonade (LMND - Free Report) shares soared 15.6% in the last trading session to close at $24.08. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 14.9% gain over the past four weeks.

Improvement in premium per customer, continued shift in the mix of underlying products toward higher value policies and instalment fees and a robust capital position continue to drive LMND.

Higher net added customers as well as expansion of geographic footprint and product offerings are likely to boost gross written premium. In-force premium is likely to have been aided by an increase in customer base as well as an improvement in premium per customer.

Commission and Other Income is expected to increase on the back of growth on premium placed with third-party insurance companies and higher installment fees billed.

Lemonade boasts a solid capital position. Its existing cash and cash equivalents will be sufficient to meet working capital needs and capital expenditure over at least the next 12 months.

This company is expected to post quarterly loss of $1.02 per share in its upcoming report, which represents a year-over-year change of +7.3%. Revenues are expected to be $97.64 million, up 95.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Lemonade, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LMND going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Lemonade is part of the Zacks Insurance - Multi line industry. MetLife (MET - Free Report) , another stock in the same industry, closed the last trading session 1.5% higher at $60.26. MET has returned 8.9% in the past month.

MetLife's consensus EPS estimate for the upcoming report has changed +0.5% over the past month to $1.90. Compared to the company's year-ago EPS, this represents a change of -5%. MetLife currently boasts a Zacks Rank of #3 (Hold).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


MetLife, Inc. (MET) - free report >>

Lemonade, Inc. (LMND) - free report >>

Published in