Analyst Matthew Carletti of JMP Securities reiterated a Buy rating on Lemonade (LMND – Research Report), with a price target of $40.00.
Matthew Carletti decided to rate Lemonade’s stock with a Buy based on a number of key factors. Firstly, Lemonade’s financial performance in 3Q23 was quite promising, with results surpassing expectations both on the top and bottom lines. This was accompanied by an accelerated schedule from management for reaching cash flow breakeven by late 2025, a goal set to be achieved with hundreds of millions in unrestricted cash in the bank.
Additionally, Lemonade has been successful in implementing significant rate increases, including a 51% rate hike for its California Car book, which is expected to contribute to an improved loss ratio through 2023 into 2024. Despite these rate hikes, the company continues to expand its customer base, expecting to cross the 2 million mark this month, and increase its average premium per customer and in-force premiums, all of which exceeded estimates. Lastly, Lemonade’s heavy emphasis on technology and AI investment is anticipated to offer significant efficiency advantages over its competitors in the long run.
According to TipRanks, Carletti is a 3-star analyst with an average return of 0.6% and a 53.82% success rate. Carletti covers the Financial sector, focusing on stocks such as Arch Capital Group, Old Republic International, and Hanover Insurance.
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Lemonade (LMND) Company Description:
Lemonade Inc operates in the insurance industry. The company offers digital and artificial intelligence based platform for various insurances and for settling claims and paying premiums. The platform ensures transparency in issuing policies and settling disputes.
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