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Strength Seen in Lemonade (LMND): Can Its 12.8% Jump Turn into More Strength?

Lemonade (LMND) shares ended the last trading session 12.8% higher at $18.83. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 16.4% gain over the past four weeks.

Lemonade should continue gain from higher net added customers as well as expansion of geographic footprint. Higher prevalence of multiple policies per customer, growth in the overall average policy value and continued shift in the mix of underlying products toward higher value policies are likely to drive premium per customer year.

Lemonade boasts a solid capital position. Its existing cash and cash equivalents will be sufficient to meet working capital needs and capital expenditure over at least the next 12 months.

LMND has a track of meeting or outperforming its financial guidance for 10 consecutive quarters.

This company is expected to post quarterly loss of $1.17 per share in its upcoming report, which represents a year-over-year change of -2.6%. Revenues are expected to be $78.85 million, up 92.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.


For Lemonade, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LMND going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Lemonade is a member of the Zacks Insurance - Multi line industry. One other stock in the same industry, Oscar Health, Inc. (OSCR), finished the last trading session 6.5% higher at $4.10. OSCR has returned 47% over the past month.

For Oscar Health, Inc. , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$1.01. This represents a change of -6.3% from what the company reported a year ago. Oscar Health, Inc. currently has a Zacks Rank of #3 (Hold).

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