Insurance company

Lemonade stock appears after earnings as insurance company plans to slow spending growth

Shares of Lemonade Inc. LMND,
+1.96%
rose more than 8% in after-hours trading on Monday after the company, which provides renters’ insurance, auto insurance and more, posted a smaller-than-expected loss and reported it was slowing the spending growth. The company generated a net loss of $67.9 million, or $1.10 per share, compared to a loss of $55.6 million, or 90 cents per share, in the prior quarter. Analysts tracked by FactSet had expected a GAAP loss of $1.33 per share. Revenue fell from $28.2 million to $50.0 million, while analysts expected $47.6 million. Executives said in a letter to shareholders that “fortunately” the company was “well capitalized at the start of the recession, so [the] the increase in the cost of capital has not had a major impact on our business. At the same time, they acknowledged that over the past few months they “have made adjustments to our plan, with the goal of ensuring that we never have to raise capital.” In doing so, the company has slowed spending and hiring growth, and executives therefore expect to perform better on an adjusted earnings before interest, tax, depreciation and amortization (EBITDA) basis this year. Lemonade forecasts a loss of $240-245 million based on Adjusted Ebitda, compared to previously forecasting a loss of $265-280 million.” We will continue to execute our strategy, just one moderate level.” Stocks are up 18% in the past three months as the S&P 500 SPX,
+2.13%.
advanced 0.4%.