Shares of Lemonade fell after the insurance company issued soft revenue guidance for the year and said it is ramping up its investments back into the company, a move that Lemonade warned will weigh on earnings in the coming quarters.
The stock fell about 16% to $18.27 in premarket trading. Through Tuesday, shares were up more than 33% over the past 12 months.
The company said Tuesday it is targeting 2024 revenue of $505 million to $510 million, below the $518.5 million that analysts surveyed by FactSet expected.
At the same time, Lemonade said it is doubling its so-called growth budget from $55 million last year. In a letter to shareholders, the company said the higher spend should boost earnings in the future, but will weigh on near-term profit.