Lemonade’s stock plummets despite exceeding 2024 expectations.

March 3, 2024
1 min read

TLDR:

Despite topping estimates, Lemonade’s stock crashed by 25% on Wall Street due to its forecast for 2024, which includes doubling marketing expenses and a deceleration in revenue growth. The company aims to increase premiums by 50% and plans to leverage AI infrastructure to minimize losses and enhance operational efficiency.

In 2023, Lemonade significantly reduced marketing expenses and experienced robust revenue growth, but plans to increase marketing expenses to $200 million in 2024, constituting nearly half of its revenues. The company’s primary challenge is to accelerate growth while minimizing EBITDA losses, with long-term prospects suggesting positive cash flow in 2025 and adjusted operating profit in 2026.

Investors are unsettled by Lemonade’s projections, as it still faces significant losses despite nearly 70% revenue growth. The company anticipates reaching half a billion dollars in revenues with adjusted EBITDA losses similar to those of 2023.

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