Lemonade tops analysts’ estimates for earnings and revenue in fiscal Q4

Written by: Wajeeh Khan
March 2, 2021
  • Lemonade tops analysts’ estimates for earnings and revenue in fiscal Q4.
  • The insurance company forecasts up to £16.16 million of revenue in Q1.
  • Lemonade shares slid more than 7% in after-hours trading on Monday.

Lemonade Inc. (NYSE: LMND) reported its financial results for the fiscal fourth quarter on Monday that topped analysts’ estimates for earnings and revenue. The company, however, gave dovish guidance for the ongoing quarter.

Lemonade shares opened at £91.10 per share on Monday and closed the regular session at £94.85 per share. In the extended trading, the stock tumbled to £87.67 per share. Lemonade had started the year 2021 at a per-share price of £81.39 versus £49.84 per share, at which it debuted in the stock market last year. Learn more about how do people make money on the stock market.

Lemonade Q4 financial results versus analysts’ estimates

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Lemonade said that its loss in the fourth quarter came in at £24.34 million that translates to 43.08 pence per share. In the comparable quarter of last year, its loss stood at a lower £23.48 million, or £2.08 per share.

The insurance company valued its revenue in Q4 at £14.72 million versus the year-ago figure of a higher £16.87 million. In related news, Lemonade announced a Q&A platform for shareholders on Monday.  

According to FactSet, experts had forecast the company to record £13.79 million of revenue in the recent quarter. Their estimate for per-share loss stood at a higher 45.95 pence per share. Lemonade debuted on the New York Stock Exchange in the first week of July 2020. The insurance firm opened 75% up in its U.S. market debut.

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Lemonade’s guidance for the fiscal first quarter

For the fiscal first quarter, Lemonade forecasts its revenue to fall in the range of £15.44 million to £16.16 million. It expects up to £84.01 million of revenue for the full financial year. Analysts, on the other hand, are calling for £15.87 million of revenue for Lemonade in Q1 and £80.13 million of revenue in the current year as a whole. In its letter to shareholders on Monday, Lemonade said:

“For the full year 2020, our gross loss ratio was 71%, as compared to 79% in 2019. Our fourth-quarter gross loss ratio was 73%, little changed from 72% in Q3 2020 and 73% in Q4 2019. This apparent stability in our Q4 loss ratio – both year-on-year and quarter-on-quarter – masks some noteworthy undercurrents.”

Lemonade concluded 2020 at a per-share price of £87.95. At the time of writing, the American insurance company is valued at £5.71 billion.