Lemonade’s CFO Endorsed the Stock—Since Then, It’s Plunged 20%
At the end of last year, the digital insurance company held a highly publicized investor conference filled with slogans, promises, and explanations about the company’s future. But instead of the stock climbing, it has only dropped since then, raising the question: Why do executives keep making statements that impact stock prices in the short term?
"I’ve never been as confident in the future of the company I’m at as I am now," said Tim Bixby, CFO of digital insurance firm Lemonade Lemonade -0.15% , a few months ago. Bixby made this statement during a well-promoted investor conference that the company aggressively hyped in the weeks leading up to it. At its peak, he even explained why the stock should reach $90. But instead of approaching that astronomical target—more than doubling at the time—the stock has since dropped nearly 21%.
At the time, we were critical of what we saw as a misuse of the investor conference platform, especially discussing the stock price without specifying a timeframe. The company did present concrete forecasts, including a transition to positive EBITDA in 2026 and profitability in 2027. However, it also threw out numerous figures without clarifying when they would materialize. Besides the stock price projection, the CFO also declared that premiums (IFP) would skyrocket tenfold to $10 billion—but without providing any timeline.
This approach is, at best, unserious and may even warrant regulatory scrutiny. The company teased the event with hints and teasers on social media. Executives even gave interviews, promising to deliver significant forecasts. While those forecasts were indeed provided, they were accompanied by a slew of unsubstantiated figures—some of which directly influenced the stock price.
When the CFO—the person most familiar with the company’s financials—says the stock should double, investors listen. Lemonade’s executives know this, and like many others in the market, they sometimes use their position irresponsibly. Often, it’s not out of malice but frustration that investors don’t see what insiders do. Still, statements like these are best avoided—especially by a company aspiring to become a major, established insurer.
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By the way, while the stock initially surged about 15% following the investor conference, those gains quickly evaporated, and it now trades 20% lower than before the event. To be fair, Lemonade did face an unexpected challenge: the massive wildfires in Los Angeles, one of its key markets, which contributed to the stock’s decline. However, the company has yet to provide any evidence that it deserves such a lofty valuation.
A Strong Quarter, But Weaker Guidance
Lemonade beat analyst expectations in Q4, reporting $149 million in revenue alongside a loss of $0.42 per share. However, its guidance for the upcoming quarter and full year disappointed, partly due to the January wildfires in Los Angeles.
The company’s Q4 revenue came in at $149 million, marking a 29% increase year-over-year and surpassing analysts' expectations of $145 million. The revenue growth was driven by a 26% jump in premiums (IFP) to a total of $944 million.
Bottom line, Lemonade posted an adjusted loss of $0.42 per share—an improvement over the $0.61 per-share loss a year ago and better than analysts’ projections of a $0.60 loss. That said, the company’s EBITDA remained negative at -$24 million.
Lemonade ended Q4 with a positive cash flow of $27 million, marking the first time it has closed a year with a positive cash flow ($48 million).
Looking ahead, the company expects Q1 revenue between $143 million and $145 million—below analysts’ estimates of $151.9 million. For the full year 2025, it projects revenue of $655 million to $657 million, again falling short of the consensus forecast of $663.3 million. The company noted that these projections account for the impact of the Los Angeles wildfires, which it estimates resulted in a $45 million hit to gross profit/loss and a $20 million EBITDA impact.
Shai Wininger, Lemonade’s Co-Founder and President: "This has been the best year since the company’s inception. We ended the year with 2.5 million customers, nearly $1 billion in premiums, positive cash flow, unprecedented underwriting results, and a doubling of gross profit from last year. Frankly, I can’t think of a single metric that hasn’t improved significantly over the past year. These outstanding results stem from years of investment in automation and AI. These systems now operate entire segments of the business without human intervention, leading to unparalleled efficiency, competitive pricing, and instant, top-tier service for our customers."
- 1.Ho Lee She It (ל"ת)אנונימי 26/02/2025 16:24הגב לתגובה זו
Gilad Altshuler Explains Why He Favors Investing in Wall Street
Altshuler Shaham has yet to regain momentum—outflows continue despite strong returns last year. The past few months have spoiled the party, as the firm’s bias toward the U.S. market has once again weighed on its performance relative to competitors.
Speaking at the Capital Market Conference for Long-Term Savings, Gilad Altshuler, co-founder and major shareholder of the investment house, explained his preference for the American market.
"If we look at the past 30 years, the
Tel Aviv Stock Exchange would need to triple its returns just to match the Nasdaq or S&P 500. The Israeli market has significantly underperformed because it lacks technology stocks. Israel has plenty of leading tech companies, but they all trade overseas—on
Wall Street. The question is whether the future belongs to real estate, insurance, gas, and banks, or to the next big innovations—ones we don’t even know about yet, but that will eventually turn into trillion-dollar giants."
"We’re
sitting here, a group of investment managers, and not a single one of us bought Tesla or Nvidia when they were small companies. None of us bought Apple when it was on the brink of bankruptcy. None of us bought Google. That’s because, as seasoned investors,
we focus on P/E ratios, book value, and growth."
Altshuler recently stated that despite the local market's strong performance over the past year, Wall Street remains the place to be over the long term. Altshuler Shaham continues
to focus its equity investments abroad—not due to Israel’s economic situation, which he describes as strong, but because of the opportunity in technology companies. He pointed out that time and again, people have assumed U.S. indices were at their peak, only
for them to break new records. The explanation? Technological revolutions. "First, it was the cloud revolution. Now it’s AI. And already, people are talking about quantum computing. The future will bring even more developments that we can’t yet imagine, and
they will drive the market forward."
How Will Donald Trump Impact the Market?
"Trump thinks like a businessman. He operates as a dealmaker. He has no
problem doing business with people like Putin or Kim Jong-un. Maybe that’s good for the economy—I don’t know if it’s good for humanity. Either way, I wouldn’t put too much weight on Trump. What really moves the global economy are demographics and innovation.
It doesn’t matter who has been president of the U.S. over the past 20 years—none of them invented Tesla, Nvidia, Google, the Metaverse, or Apple."
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