Analyst Bob Huang from Morgan Stanley maintained a Hold rating on Lemonade (LMND – Research Report) and keeping the price target at $34.00.
Bob Huang has given his Hold rating due to a combination of factors surrounding Lemonade’s recent performance and future outlook. The company’s net loss ratio improved significantly, coming in well below expectations, which provides some resilience as Lemonade ventures into the competitive personal auto markets. Additionally, total revenue slightly exceeded consensus estimates, driven by higher ceding commission income and net investment income, while adjusted EBITDA loss was better than anticipated.
However, Bob Huang also noted some concerns that justify the Hold rating. The guidance for both the first quarter and full year 2025 fell short of expectations in terms of premiums, total revenue, and adjusted EBITDA, casting doubt on the company’s ambitious growth and earnings plans. Moreover, the elevated sales and marketing expenses were above consensus, and the execution of the company’s growth strategy amidst increasing competition in the personal lines market remains a critical factor for future performance.
According to TipRanks, Huang is an analyst with an average return of -1.2% and a 55.24% success rate. Huang covers the Financial sector, focusing on stocks such as Progressive, AFLAC, and Allstate.