Lemonade, Inc. (NYSE:LMND) Released Earnings Last Week And Analysts Lifted Their Price Target To US$20.00

As you might know, Lemonade, Inc. (NYSE:LMND) just kicked off its latest quarterly results with some very strong numbers. Lemonade beat expectations with revenues of US$137m arriving 8.0% ahead of forecasts. The company also reported a statutory loss of US$0.95, 6.9% smaller than was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Lemonade

Taking into account the latest results, the most recent consensus for Lemonade from eight analysts is for revenues of US$653.6m in 2025. If met, it would imply a sizeable 33% increase on its revenue over the past 12 months. Losses are expected to be contained, narrowing 18% from last year to US$2.48. Before this latest report, the consensus had been expecting revenues of US$656.2m and US$2.51 per share in losses.

The consensus price target rose 6.1% to US$20.00, with the analysts increasing their valuations as the business executes in line with forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Lemonade, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$11.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Lemonade's revenue growth is expected to slow, with the forecast 25% annualised growth rate until the end of 2025 being well below the historical 43% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.2% annually. So it's pretty clear that, while Lemonade's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Lemonade. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lemonade analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Lemonade you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.