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On Wednesday, JMP analysts maintained their positive stance on Lemonade Inc . (NYSE: NYSE:LMND) shares, reiterating a Market Outperform rating with a $60.00 price target. The analysts’ confidence follows Lemonade’s first-quarter 2025 performance, which surpassed expectations for both revenue and earnings. Trading at $30.31, InvestingPro analysis suggests the stock is slightly undervalued, though investors should note its high volatility with a beta of 2.14.
Lemonade reported an adjusted gross profit of $46 million, which outperformed JMP’s estimate of $41 million and the consensus of $37 million. With a robust gross profit margin of 47.39% and revenue growth of 22.5% year-over-year, the company continues to expand its market presence. The company’s trailing twelve-month (TTM) gross loss ratio held steady at 73%, and the accident year (AY) gross loss ratio excluding catastrophes was consistent at 67%. Notably, the gross loss ratio for the quarter came in at 78%, better than JMP’s anticipated 94% and the consensus forecast of 83%. InvestingPro subscribers have access to over 30 additional financial metrics and expert insights that provide deeper context to these operational improvements.
The analysts also noted significant improvements in Lemonade’s operating leverage, which they expect will continue as the company scales. In-force premium (IFP) growth has accelerated for six consecutive quarters, with projections indicating a further increase to approximately 28% growth in 2025, compared to 22% in the first quarter of 2024, and expectations of over 30% growth in 2026. With a market capitalization of $2.22 billion and impressive 73.4% return over the past year, Lemonade demonstrates strong growth potential despite current profitability challenges. For comprehensive analysis of Lemonade’s growth trajectory and peer comparison, consider accessing the detailed Pro Research Report available on InvestingPro.
Additionally, Lemonade’s auto insurance offering, Lemonade Car, is showing early signs of success. The company’s use of telematics to provide insights at or near the point of sale is a unique approach that is driving higher conversion rates. This strategy has resulted in a doubling of cross-sales of Lemonade Car in the first quarter compared to the fourth quarter of the previous year.
The analysts’ rating and price target are based on a discounted EBITDA analysis, which suggests continued confidence in Lemonade’s growth trajectory and operational strategy.
In other recent news, Lemonade Inc. reported its first-quarter 2025 financial results, surpassing analysts’ expectations. The company posted an earnings per share (EPS) of -$0.86, outperforming the forecast of -$0.92, and achieved revenue of $151.2 million, exceeding the projected $145.92 million. Lemonade’s In-Force Premium (IFP) grew by 27% year-over-year, reaching over $1 billion, while the customer base expanded by 21% to 2.5 million. The company maintains a strong cash position with $996 million in reserves. Lemonade Car showed significant growth, expanding into new markets, and the company plans to continue its investment in growth, particularly in the car insurance sector. The firm projects full-year revenue between $661 million and $663 million and expects to reach EBITDA breakeven by the end of 2026. Analysts noted the company’s strategic focus on leveraging AI to improve operational efficiency and profitability.
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