Lemonade (LMND) shares soared 9.4% in the last trading session to close at $44.31. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 31% gain over the past four weeks.
LMND remains focused on accelerating growth and improving efficiencies by acquiring profitable new businesses and increasingly focusing on the car insurance business. It believes the car insurance business will become a major growth engine for the company.
This insurer now wants to grow business by ten fold in near future. Lemonade is focusing more on technology and AI as it gives structural advantage as well as competitive advantage.
It has pursued various strategic initiatives for CAT exposure, including geographic diversification, product diversification, introducing partners with whom it places a premium in certain regions, and targeted non-renewals in CAT-exposed areas. Lemonade noted that diversification has helped it deliver sustained sequential improvement in the gross loss ratio.
This company is expected to post quarterly loss of $0.78 per share in its upcoming report, which represents a year-over-year change of +3.7%. Revenues are expected to be $163.39 million, up 33.9% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Lemonade, the consensus EPS estimate for the quarter has been revised 0.8% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. 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 part of the Zacks Insurance - Multi line industry. International General Insurance Holdings Ltd. (IGIC), another stock in the same industry, closed the last trading session 3.7% lower at $22. IGIC has returned -0.4% in the past month.
International General Insurance's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.55. Compared to the company's year-ago EPS, this represents a change of -25.7%. International General Insurance currently boasts a Zacks Rank of #4 (Sell).
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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.
