Shares of Lemonade (NYSE: LMND) are down 20.9% this week, according to data provided by S&P Global Market Intelligence, even after the insurtech company announced stronger-than-expected second-quarter 2023 results. To be sure, the bulk of Lemonade's decline this week came after its quarterly earnings hit the wires on Wednesday evening.

As for headline numbers, Lemonade's revenue climbed 109% year over year to $104.6 million. In-force premium (IFP) climbed 50% year over year, to $687 million, driven by a combination of a 24% increase in premium per customer and 21% growth in Lemonade's number of customers, to just over 1.9 million. On the bottom line, that translated to a net loss of $67.2 million, or $0.97 per share (narrowing from a loss of $1.10 per share in the same year-ago period). By contrast, most analysts were modeling a wider loss of $1 per share on lower revenue of $97.6 million.

So why the drop? I think it's a combination of two things: first, the fact that Lemonade stock had rallied an incredible 115% from its April 2023 lows leading into this report; and second, some concern that unseasonable weather catastrophes (or CATs) increased Lemonade's quarterly gross loss ratio by 8 percentage points year over year to 94%.

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Source Fool.com