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Alberto Sigismondi's avatar
3 of my smaller holdings reported recently. Some quick thoughts

  • $SOFI Happy with their results. I will add to to lower my cost basis
  • $GDRX Meh.. concerned with concentration surprises. Have to think it through, maybe the money is better off somewhere else...
  • $LMND Happy with their results. I will add to it to lower my cost basis
Dissecting the Markets's avatar
$4.2m follower assets
$LMND reports earnings on May 10 @ 8am EST. What three metrics should investors pay attention to?
As of writing, $LMND is trading at $21.15/share. Since IPO, their stock is down by 69%. Let's analyze some metrics that they've reported in their Q4 2021 shareholder letter.

  1. Gross Loss Ratio

The Gross Loss Ratio describes the ratio of losses that an insurance company has compared to the amount of premium that it's earning. From last quarter, their ratio is very bad. Nearly all the money $LMND reaps in premiums is being spent to handle losses. This ratio is a big reason why investors are concerned about the sustainability of Lemonade's business. It indicates high financial distress.

Lemonade has to either:
  1. raise premiums
  2. not renew the policies of loss-making clients

If Lemonade's Gross Loss Ratio expands above 100%, then I don't see their Q1 2022 earnings report reaction going well.

  1. Premium per customer

As $LMND adds more insurance products, they're able to increase the amount of premium they earn per customer.

And even if an insurance company earns more premium per customer, it would all be meaningless without a high customer retention

  1. Annual Dollar Retention

Some will cheer on the fact that $LMND has an annual dollar retention rate of 82%...

But when you read closely, most of the growth in the annual dollar retention rate was due to the fact that some customers had multiple policies (like auto and renters insurance, for example). Other than that, the retention rate seems good in my view.

*If anyone has the data on the retention rates for other insurance companies, please comment them below.

To conclude, I've listed three metrics that investors should pay attention to for Lemonade's next earnings release.
post mediapost media
I believe Northwestern Mutual has like a 96% retention rate. My question with a company like $LMND is, by not having the traditional agents that go out and prospect in their local markets, do they increase or reduce retention? Does that personal touch help or in today’s consumer habits are companies better off with the AI
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Mark Paddey's avatar
Do the math...
$LMND is set to complete the acquisition of $MILE in Q2 with an all-stock deal.

Metromile shares will be converted to Lemonade shares on a 19:1 ratio. Metromile ended FY2021 with $121M cash on the balance sheet and 128.22M shares outstanding.

In a 19:1 all-stock acquisition, Lemonade (at current stock prices) will be acquiring Metromile for $137M. Subtract the value of cash to be acquired and $LMND gets all of $MILE's state insurance licenses, IP, telematics data, and in-force premiums for a mere $16M.

Steal of a deal.
Josh Kohn-Lindquist's avatar
$8.4m follower assets
New additions
Added to $SE $RBLX $ROKU $DOCU and $LMND on today's (and last 3 months) weakness.

Least confident in Lemonade, so it is my smallest position of the group -- but I really do feel fairly safe with the other four over the long haul.

Starting to occasionally second guess myself on adding to stocks that are down big lately, but in fairness, that is most of my portfolio at the moment.

Keeping a focus on quality and continuing to dollar cost average over time.
I feel exactly the same on Lemonade. I love the idea of what it’s trying to do.

I just don’t understand the space well enough to know if it has a moat there and can really pull it off over the long haul.
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Mark Paddey's avatar
LMND Q4 2021
$LMND trading down 17% AH on Q4 earnings report - massive increase in loss ratio and lackluster guidance to blame. At these levels, market cap is rapidly converging on company's cash & cash equivalents of $1.1B.
I saw @parrot and @laststock had posted about their interest in earnings for Lemonade—I'm curious to hear all your thoughts. This is one I had been following loosely but never bought and I know some smart investors who had been saying that this is a great time to enter. With market cap at $1.4B and $1.1B in cash on the balance sheet I'd say this does look interesting but I want to know more about that 96% loss ratio!
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ParrotStock's avatar
$245.7m follower assets
Market's Closed
What are all you US investors doing with your day off from the Markets today?

Outside of the usual 9-5 duties, I'm getting ready for another week of earnings; primarily $TDOC $SQ $LMND $MGNI

Could have a few other microcaps who haven't announced a date sneak in there this week as well.

Beyond that, I'm enjoying the extra day of peace from the recent market volatility. 😊

HAGD! 🦜
Hi Parrot :)

I've starting a book that has been on my reading list for a while- A Random Walk Down Wall Street by Burton Malkiel.

Always best to get prepared for another earnings week! Out of the four you have listed which would you say your most excited for and why ? Also would be helpful to know which one you perhaps are slightly anxious about.
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