Yahoo Finance Analysts Are Updating Their Lemonade, Inc. (NYSE:LMND) Estimates After Its Second-Quarter Results
There's been a major selloff in Lemonade, Inc. (NYSE:LMND) shares in the week since it released its second-quarter report, with the stock down 29% to US$16.64. The results look positive overall; while revenues of US$122m were in line with analyst predictions, statutory losses were 6.3% smaller than expected, with Lemonade losing US$0.81 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Lemonade
Following the latest results, Lemonade's seven analysts are now forecasting revenues of US$515.9m in 2024. This would be a solid 9.5% improvement in revenue compared to the last 12 months. Losses are expected to increase slightly, to US$3.00 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$515.0m and losses of US$3.01 per share in 2024.
The consensus price target was unchanged at US$19.17, suggesting that the business - losses and all - is executing in line with estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Lemonade, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$11.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Lemonade's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 44% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.3% annually. Even after the forecast slowdown in growth, it seems obvious that Lemonade is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$19.17, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Lemonade analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Lemonade that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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