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- Young, Yet Cheap: Lemonade
Young, Yet Cheap: Lemonade
Lemonade is a new generation insurance company that targets a young audience. It stocks lost about 93% from peak prices during the past two years. Moreover, these stock prices continue to go down this year despite the rally in the tech sector. The company’s stocks lost more than 10% in 2023, ignoring inspiring financial results and strong positive guidance for 2023. The company has five primary products available in the market, including home insurance, renters’ insurance, car insurance, and pet insurance, all making cross sales even more effective. The company declares its mission as “transforming insurance from a necessary evil into a social good." The company has reported revenues up by 116% year-on-year to $88.4 million on a client base up by 27% year-on-year to 1.81 million in the Q4 2022. Lemonade is mostly reinsuring its risks, causing the insurance premium for agents to decline as the number of clients is increasing. The premium dropped from 72% in the Q4 2021 to 58% in the same period of 2022. Lemonade offers insurances on-line, which is quite valuable for its young audience. These people are growing older, having families and seeing their income rise over time. All these factors lead them to increase their interactions with financial firms, including insurance companies. Thus, targeting the Z generation could be a solid stake for future gains.
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