Lemonade beat revenue forecasts, but slumps in New York trading

stock Lemonade Falling on Wall Street. Analyst Andrew Anderson from the investment bank Jefferies published an initial response to the reports and wrote that “the annual revenue forecast is rising and management continues to expect positive EBITDA in the fourth quarter of the year, however the annual EBITDA forecast remained unchanged despite the forecast being exceeded in the second quarter, which we believe could lead to an underperformance of the stock today.” Lemonade recorded a negative EBITDA of $19 million in the second quarter, approximately $2 million above the mid-range of its forecast.

Adjusted EBITDA (earnings excluding interest, tax, depreciation and amortization) continued its improving trend, but was still negative at $19 million, compared to negative $43 million in the corresponding quarter. Looking ahead, Lemonade is revising its revenue forecast slightly upward: the mid-range forecast now reflects annual revenue of $1.217 billion, up from $1.2 billion previously. There is no change in the annual adjusted EBITDA forecast, which will be negative in the amount of 47-51 million dollars. Lemonade continues to expect that it will turn to EBITDA positive during the fourth quarter of this year, which will reach approximately $8 million. In the third quarter, the EBITDA is still expected to be negative, in the amount of 20-23 million dollars, and Moneyid expects revenues of 323-326 million dollars in the third quarter, higher than the analysts’ forecasts.

During the second quarter, Lemonade’s free cash flow was positive at $18.8 million, and cash flow from operating activities was negative at $4 million.

In the letter to investors, it was stated that “the results of the second quarter were excellent, and were again characterized by high growth in the top line”, and that “we are making consistent progress towards our positive first quarter in EBITDA”. At the same time, the company announced the replacement of CFO: Tim Bixby, who held the position since 2017, will leave and be appointed director, and Nick Stead will be promoted in his place.

Lemonade, founded by Daniel Schreiber (CEO) and Shay Wininger (President), is traded on the New York Stock Exchange with a value of 4.8 billion dollars. In the last year, the stock has risen by about 70%, When during this year the stock traded in a relatively wide range of prices, 36-97 dollars. According to Wall Street Journal data, there are currently 12 analysts covering Lemonade shares, of which three are positive, six are neutral and three are negative, and the average target price reflects a modest premium of 3.4% on the share price before the reports were published.