Lemonade Inc. LMND is expected to witness an improvement in its top and bottom lines when it reports fourth-quarter 2025 results on Feb. 19.
The Zacks Consensus Estimate for LMND’s fourth-quarter top line is pegged at $216.67 million, indicating a 45.6% increase from the year-ago reported figure.
The Zacks Consensus Estimate for LMND’s fourth-quarter bottom line is pegged at a loss of 41 cents, indicating a 2.38% improvement from the year-ago reported figure.
LMND’s Solid Earnings Surprise History
LMND’s earnings beat the Zacks Consensus Estimates in each of the trailing four quarters, the average surprise being 23.40%.
What the Zacks Model Unveils for LMND
Our proven model does not conclusively predict a beat for Lemonade this time around. This is because the stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat. This is not the case, as you can see below.
Earnings ESP: LMND has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Lemonade, Inc. Price and EPS Surprise
Lemonade, Inc. price-eps-surprise | Lemonade, Inc. Quote
Zacks Rank: LMND currently has a Zacks Rank #3.
Factors Likely to Shape LMND's Q4 Results
Lemonade’s in-force premium is likely to have improved on expanding customer base, higher premium per customer, product enhancement and geographic diversification. The Zacks Consensus Estimate is pegged at $1.2 billion. Management expects the in-force premium as of Dec. 31, 2025, to be between $1.218 billion and $1.223 billion.
An increasing 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 have favored an increase in premium per customer. The Zacks Consensus Estimate for premium per customer is pegged at $407 million.
Gross written premium is likely to have increased, given the rise in net added customers year over year, driven by the success of digital advertising campaigns and partnerships, continued expansion of geographic footprint, and product offerings. Management estimates gross earned premiums between $283 million and $286 million.
Improved performance across Europe is also likely to have been a tailwind for the insurer’s performance. The use of an AI platform, growth acceleration and prudent underwriting are likely to have favored continued improved results from Europe business.
Investment income is likely to have benefited from the diversification of the company's investment portfolio with higher returns. The Zacks Consensus Estimate is pegged at $10.4 million.
Revenues are likely to have improved due to an increase in gross earned premiums and an increase in investment income. Management estimates revenues between $217 million and $222 million.
Given increased brand and performance advertising, sales and marketing expense is expected to have increased. General and administrative expense is likely to have increased as well due to a rise in interest expense from the financing agreement
Stocks to Consider
Here are three insurance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
National Bank of Canada NTIOF has an Earnings ESP of +2.15% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for fourth-quarter 2025 earnings is pegged at $2.10 per share, indicating a year-over-year increase of 1.9%.
NTIOF’s earnings beat estimates in three of the last four quarters while missing in one.
Toronto Dominion Bank TD has an Earnings ESP of +2.73% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for fourth-quarter 2025 earnings is pegged at $1.59 per share, indicating a year-over-year increase of 14.3%.
TD’s earnings beat estimates in each of the last four reported quarters.
Blackstone Secured Lending Fund BXSL has an Earnings ESP of +0.76% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2025 earnings is pegged at 79 cents per share, indicating a year-over-year decrease of 5.9%.
BXSL’s earnings beat estimates in two of the last four quarters while missing in the other two.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
