Does This Awful Number Spell Trouble for Lemonade?
Insurance provider Lemonade (NYSE: LMND) was an IPO darling when it debuted on the stock market last July, but it's gone through a series of ups and downs since then. The stock price got a bump recently after the company announced its new product, Lemonade Car, but the price tanked after the company released its first-quarter earnings report on Wednesday.
What was so bad about the company's latest earnings report that it resulted in an 18.5% stock price drop on the day after the earnings release? And is this a sign of more widespread trouble for the company?
Let's go through the good parts first. Lemonade's in force premium (IFP) metric (basically active accounts) increased 89% year over year to $252 million in the quarter. The gross earned premium (what was collected in premiums before payouts and expenses) metric rose 84% to $56 million. Premium per customer increased 25% to $229, and customer count increased 50% over Q1 2020 to just under 1.1 million. Non-renters insurance accounted for half of the new business, an increase from a third of new business in Q1 2020.
Source Fool.com
