Fact based stock research
Lemonade (NYSE:LMND)

US52567D1072

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Lemonade stock research in summary

lemonade.com

ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), Lemonade (Property & Casualty Insurance, USA) shares have lower financial characteristics compared with similar stocks. Shares of Lemonade are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 11, which means above-average debt burdens) but show above-average growth (Growth Rank of 75). ...read more

RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on Lemonade's financial characteristics. As the company Lemonade shows low value with an Obermatt Value Rank of 19 (81% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 75% of comparable companies (Obermatt Growth Rank is 75). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 11 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Lemonade, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	19
Growth Rank	75
Safety Rank	11
Combined Rank	16

Country	USA
Industry	Property & Casualty Insurance
Index
Size class	Small

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Lemonade

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	15	32	19
GROWTH
GROWTH	33	53	81	75
SAFETY
SAFETY	39	11	11	11
SENTIMENT
SENTIMENT	n/a	35	32	^new
360° VIEW
360° VIEW	n/a	17	6	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Lemonade is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	15	32	19
GROWTH
GROWTH	33	53	81	75
SAFETY
SAFETY	39	11	11	11
COMBINED
COMBINED	6	16	16	16

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Lemonade the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), Lemonade shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Lemonade. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 55, which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning Lemonade's profit levels. But Price-to-Sales is 22 which means that the stock price compared with what market professionals expect for future profits is higher than for 78% of comparable companies, indicating a low value concerning Lemonade's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 25 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on Lemonade's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Lemonade is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	1	3	26	22
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	3	4	55	55
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	22	57	25
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	1	15	32	19

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Lemonade; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2022, Lemonade shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Lemonade. Sales Growth has a rank of 100 which means that currently professionals expect the company to grow more than 100% of its competitors. Stock Returns are also above average with a rank of 95. But Capital Growth has only a rank of 5, which means that currently professionals expect the company to grow its invested capital less than 95% of its competitors. Profit Growth is also low, with a rank of only 42, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 95% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	53	100	94	100
PROFIT GROWTH
PROFIT GROWTH	n/a	8	52	42
CAPITAL GROWTH
CAPITAL GROWTH	n/a	93	63	5
STOCK RETURNS
STOCK RETURNS	65	5	55	95
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	33	53	81	75

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Lemonade.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% compared with alternatives), the company Lemonade has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Lemonade is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Lemonade and the other two below average. Leverage is at a rank of 94 meaning the company has a below-average debt-to-equity ratio. It has less debt than 94% of its competitors.Refinancing is at a rank of 18, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 82% of its competitors. Liquidity is at a rank of 7, meaning that the company generates less profit to service its debt than 93% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% compared with alternatives), Lemonade has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Lemonade are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Lemonade and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	92	100	100	94
REFINANCING
REFINANCING	39	18	18	18
LIQUIDITY
LIQUIDITY	3	n/a	n/a	7
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	39	11	11	11

Last update of Safety Rank: 9-Sep-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Lemonade and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	6	5	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	37	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	63	50	^new
MARKET PULSE
MARKET PULSE	n/a	72	55	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	35	32	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Lemonade.
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