Lemonade, Inc. Fundamental Analysis
Lemonade, Inc. (LMND) shows moderate financial fundamentals with a PE ratio of -28.05, profit margin of -16.92%, and ROE of -26.52%. The company generates $0.8B in annual revenue with strong year-over-year growth of 40.15%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 2.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze LMND's fundamental strength across five key dimensions:
Efficiency Score
WeakLMND struggles to generate sufficient returns from assets.
Valuation Score
ExcellentLMND trades at attractive valuation levels.
Growth Score
ExcellentLMND delivers strong and consistent growth momentum.
Financial Health Score
ExcellentLMND maintains a strong and stable balance sheet.
Profitability Score
WeakLMND struggles to sustain strong margins.
Key Financial Metrics
Is LMND Expensive or Cheap?
P/E Ratio
LMND trades at -28.05 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, LMND's PEG of -0.56 indicates potential undervaluation.
Price to Book
The market values Lemonade, Inc. at 7.52 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at -33.94 times EBITDA. This is generally considered low.
How Well Does LMND Make Money?
Net Profit Margin
For every $100 in sales, Lemonade, Inc. keeps $-16.92 as profit after all expenses.
Operating Margin
Core operations generate -16.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-26.52 in profit for every $100 of shareholder equity.
ROA
Lemonade, Inc. generates $-7.09 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Lemonade, Inc. generates limited operating cash flow of $30.30M, signaling weaker underlying cash strength.
Free Cash Flow
Lemonade, Inc. generates weak or negative free cash flow of $19.63M, restricting financial flexibility.
FCF Per Share
Each share generates $0.26 in free cash annually.
FCF Yield
LMND converts 0.49% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-28.05
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.56
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.52
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.78
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.39
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.27
vs 25 benchmark
ROA
Return on assets percentage
-0.07
vs 25 benchmark
ROCE
Return on capital employed
-0.19
vs 25 benchmark
How LMND Stacks Against Its Sector Peers
| Metric | LMND Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -28.05 | 19.38 | Better (Cheaper) |
| ROE | -26.52% | 804.00% | Weak |
| Net Margin | -16.92% | -7623.00% (disorted) | Weak |
| Debt/Equity | 0.39 | 1.07 | Strong (Low Leverage) |
| Current Ratio | 1.06 | 609.22 | Neutral |
| ROA | -7.09% | -20946.00% (disorted) | Weak |
LMND outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Lemonade, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
502.12%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
-4.24%
Industry Style: Value, Dividend, Cyclical
DecliningFCF CAGR
86.14%
Industry Style: Value, Dividend, Cyclical
High Growth