Website traffic portends a juicy neighborhood

Lemonade Insurance Service Provider (NYSE: LMND) is expected to report second-quarter results today after the market closes. Lemonade offers tenant insurance, home insurance, car insurance, pet insurance, and term life insurance through its artificial intelligence (AI) platform. LMND stock has lost 43% so far this year.

The Street expects Lemonade to post a diluted loss of $1.31 per share in the second quarter, much worse than its comparative loss of $0.92 per share a year earlier. Meanwhile, revenue is pegged at $47.56 million, representing a 69.3% year-over-year growth.

Lemonade’s second quarter website traffic trends are robust

Website traffic tool TipRanks suggests the insurance provider is poised to report impressive second-quarter results. According to the tool, in the second quarter, the total number of estimated visits to lemonade.com jumped 49.02% compared to the same period last year. June alone contributed to a solid year-over-year growth of 64.30%.

Additionally, TipRanks Website Traffic Tool reports that estimated year-to-date visits are up 64.32% compared to the same period last year. These numbers suggest that Lemonade should show strong performance in the second quarter.

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Investors are very optimistic

Remarkably, TipRanks’ Stock Investors tool shows that investor sentiment is currently very positive on lemonade, with 12.2% of portfolios tracked by TipRanks increasing their exposure to LMND stocks over the past 30 days.

However, analysts have a consensus Hold rating on LMND shares based on three buys, two holds and three sells. The average lemonade price target of $24.81 implies upside potential of 3.1% from current levels.

Is lemonade overrated?

Lemonade is trading at a forward price/sales multiple of 7.7x, well above the industry median of 2.9x, implying that the stock is overvalued at current levels. Nonetheless, Lemonade is at an increasing stage in its journey and is able to turn things around with increased customer acquisition and operational efficiencies.

end thoughts

Lemonade’s AI-based platform and machine learning algorithm helps the company satisfy and grow its customer base. Although the company is currently incurring a loss, its automated insurance sales and claims handling techniques will enable it to become profitable in the long term.

Notably, the phenomenal growth in visits to Lemonade’s website in the second quarter indicates that customers are flocking to its website to source even more products and services. Additionally, the macro indicators are showing signs of improvement, indicating that Lemonade is about to see better days.

Disclosure

Sherry J. Basler