Why Lemonade Stock Is Trading Lower During Wednesday's After-Hours Session

Shares of Lemonade Inc. LMND tanked during Wednesday’s after hours session following the release of the company’s Q4 earnings results and weak Q1 guidance.

Management highlighted 2021 as very productive with the company ending it “strategically stronger than ever.” In particular, the substantial capital raise carried out during the earlier part of the year, is expected to “set our business up for years of sustained growth.” Notably, the company’s bundling, cross selling, and upselling “combined to grow Premium per customer by $53 in 2021, significantly outpacing the prior year’s $36.”

The company sees potential new ways of shifting resources to harness their technology and products, such as “leveraging our technology to lower expense ratio through automation, and loss ratio through machine learning, while growing LTV/CAC through cross selling and bundling.” As a result of some shifting in the balance of the business, management expects 2022 “to be our year of peak losses”, which will drive the “business to new levels of efficiency, growth, and profitability.” 

Lemonade ended the year “with over $1 billion in cash and investments, almost double where we started it.” 

Lemonade Inc. operates in the insurance industry, and offers a digital and artificial intelligence based platform for various insurances, setting claims, and paying premiums.

At the time of publication, shares of Lemonade were trading 15.5% lower during after hours at $19.40. The stock had a 52-week low of $22.91 (now broken) and a 52-week high of $147.07.