Key Points
Overall market
The Lower Number of New Jobless Claims Sent The Stock Market Indices into the Green Zone.
All three indices ended the day in the green as investors celebrated the 34,000 lower number of new jobless claims compared to the previous week. The concerns over the high inflation rate gave way to the excitement over a lower number of new Jobless claims, at least for one day.
WHat's Up?
Lemonade (LMND): Time to buy?
Shares of Lemonade (LMND) were up more than 7%. This new startup provides easy to use and friendly interface to buy your home insurance, pet insurance, and life insurance while using artificial intelligence to enhance its back-office processes.
The price jump today is a response to a double-digit drop after the latest quarterly earnings report. In that report, Lemonade shared 50% growth in the number of customers and a 68% jump in its Gross Loss ratio. Investors got spooked by that higher loss rate and sent the stock off the cliff on May 11th. The jump in Groos Loss ratio results from higher claims after the Texas winter storm and freeze. That's quite reasonable. Any insurance company would see a higher rate when catastrophe hits. On the positive side, take a look at the company's opportunity. It is only growing into new product categories such as car insurance. It has a more than 80% retention rate of its existing customers. It's important to remember, the stock is priced higher than its competitors. For example, the valuation ratio of the insurance provider, Aflac (AFL), is relatively lower than Lemonade. But the growth opportunity for Lemonade is significantly higher than the likes of Aflac. What's Down
Bumble (BMBL) Dropped by More Than 14% Despite a Strong Earnings Report and Higher Guidance.
A few days ago, we spoke about Match Group (MTCH). The company is an owner of more than 40 online dating and match-making apps and platforms that has been an excellent investment in the last few quarters since it spun off from IAC/InterActiveCorp (IAC).
Today, from the list of companies that finished the day in the green, I noticed shares of Bumble (BMBL) were down more than 14% below the IPO price. Bumble is a new IPO and a small competitor to Match Group. The company released its latest earnings report yesterday. Revenue was up, so was the total number of paying users. The company also increased its full-year revenue guidance. It's tough to understand why the stock is down more than 14%. It seems analysts weren't too impressed by a slight increase in the revenue forecast. From what I gather, the market is pessimistic about new IPOs, and Bumble is falling victim. Want to receive this daily stock market recap report in your mailbox?Comments are closed.
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