Lemonade Stock

Lemonade Stock Tumbles To All-Time Lows After Q4 performance

With growing tensions in Europe, inflationary pressures and an unforgiving earnings season for tech companies across the US, it has created the perfect storm for Lemonade Stock (NYSE:LMND). The stock is currently trading 17% lower in after hours trading following the companies Q4 report. Here’s everything you need to know about Lemonade Stock and its fourth quarter performance.

Lemonade beats on revenue, misses EPS & lowers guidance for 2022

There has been a common trend amongst tech companies in the Q4 earnings season, that is lowering investor expectations on 2022 growth. Although Lemonade actually beat Wallstreet consensus on revenue posting $41.0 Million, investors have focused on the companies outlook.

The important revenue drivers in Q4 were the increase of gross earned premium, increases in net investment income & commission income and a reduction in the scope of our quota share program.

“The year kicked off with a substantial capital raise that we expect will set our business up for years of sustained growth, and indeed we saw 100% revenue growth in Q4 ’21, as compared with Q4 ’20, and we ended the year with over $1B in cash and investments, almost double where we started it.”

Lemonade Q4 Shareholder Letter

Lemonade expects the next quarter revenues to be in the vicinity of $41 Million -$43 Million vs. Wallstreet’s estimate of $44.0 Million, missing consensus by $1-3 Million. Furthermore, the companies 2022 full year revenue guidance was $202 – $205 million, compared to the average forecast of $217 Million.

Lemonade Stock (NYSE:LMND): Q4 Summary

Whether or not Lemonade are being conservative on guidance due to the current market conditions remains unknown, however the lowered guidance has hit investor confidence where it hurts. With annual revenues forecasted to be $15 Million off consensus, Lemonade management now has the task of rebuilding investor confidence.

The good news for investors is Wallstreet valuations remain well above the current trading price, with an average target of $55.33. However, we may see analysts lower their valuations as the lowered guidance will impact valuation models for 2022.

Overall, we will see how the market plays out tomorrow and whether after market losses on lemonade stock can be regained or whether the stock will continue to fall to new lows.

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The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you. 

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