Can Lemonade Keep its Beat Streak Alive in Q2 Earnings?

Lemonade Inc. LMND is expected to witness an improvement in its top line when it reports second-quarter 2025 results on Aug. 5. The bottom line is expected to remain flat year over year.    

The Zacks Consensus Estimate for LMND’s second-quarter revenues is pegged at $162.4 million, indicating a 33.1% increase from the year-ago reported figure.

The Zacks Consensus Estimate for LMND’s second-quarter earnings is pegged at a loss of 81 cents. The consensus estimate loss has widened by 2 cents in the past seven days.

LMND’s Solid Earnings Surprise History

LMND earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.52%.

What the Zacks Model Unveils for LMND

Our proven model predicts a beat for Lemonade this time around. This is because the stock has the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat. 

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: LMND has an Earnings ESP of +2.40%. This is because the Most Accurate Estimate of a loss of 79 cents is narrower than the Zacks Consensus Estimate of a loss of 81 cents.

Lemonade, Inc. Price and EPS Surprise

Lemonade, Inc. price-eps-surprise | Lemonade, Inc. Quote

Zacks Rank: LMND currently has a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Shape LMND’s Q2 Results

Lemonade’s in-force premium is likely to have improved on expanding customer base, higher premium per customer, product and geographic diversification and contribution from the Metromile acquisition. The Zacks Consensus Estimate is pegged at $1.1 billion. Management expects the in-force premium as of June 30, 2025 to be between $1.061 billion and $1.064 billion.

Premium per customer is likely to have increased owing to rate increases. The Zacks Consensus Estimate for premium per customer is pegged at $402 million.

Gross written premium is likely to have increased, given the success of digital advertising campaigns and partnerships, as well as geographic and product offering expansion. 

Investment income is likely to have benefited from a diversified portfolio with higher returns. The Zacks Consensus Estimate is pegged at $9.7 million.

Revenues are likely to have improved banking on an increase in gross earned premium and an increase in investment income. 

Given increased brand and performance advertising, sales and marketing expense is expected to have increased. General and administrative expense is likely to have increased as well due to an increase in interest expense from the financing agreement.

Other Stocks to Consider

Here are three insurance stocks that you may also want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Root Inc. ROOT has an Earnings ESP of +58.28% and a Zacks Rank #1 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $1.06, indicating a year-over-year increase of 303.9%.

ROOT’s earnings beat estimates in each of the last four reported quarters.

Palomar Holdings PLMR has an Earnings ESP of +0.25% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $1.68, indicating a year-over-year increase of 34.4%.

PLMR’s earnings beat estimates in each of the last four reported quarters.

Assurant AIZ has an Earnings ESP of +2.21% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $4.43, indicating a year-over-year increase of 8.6%.

AIZ’s earnings beat estimates in each of the last four reported quarters.

 

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This article originally published on Zacks Investment Research (zacks.com).

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