LMND 3Q23: Real juice or just squeezing?

Beat primarily driven by better pricing, lower CAT losses & higher interest rates, most of which are macro windfalls that don't indicate improved execution. I still believe this stock is headed south.

Lemonade LMND 0.00%↑ published their 3Q23 earnings yesterday. As you know, I am not the biggest fan of this company. In fact, I am actively shorting it via naked short calls. That has worked well since my original bear case from November last year when it was trading at $20.

The Short Thesis for Lemonade

And it has continued to work well since I last covered 2Q23 earnings after which it dropped from $17 to a low of $10.

LMND 2Q23: Still an excellent short idea

However, it’s not working well at all today as the stock is in the middle of a major short squeeze from $11 to more than $16 at market close. I actually don’t want to cover this stock on quarterly basis, it’s not a focus of mine. But such a move requires a closer look at their financials to vet the bet.

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Performance vs. Guidance

In 3Q23, the company generated $115m in revenues with an Adj. EBITDA of -$40m both of which handily exceeded their guidance given in last quarter’s earnings release: