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An AI fintech-based insurance provider and a tobacco products maker moved above buy points on Wednesday, as both reported results that were well above analysts' expectations in the waning weeks of Q3 earnings season. Lemonade (LMND) rallied 18% in heavy volume after the fintech posted a third-quarter loss of 51 cents a share, vs. a year-ago loss of 95 cents, according to FactSet. Revenue rose 42% to $194.5 million year over year. The insurer reported gross profit margin of 41% and customer growth of 24% to 2.87 million in the quarter. It cut its adjusted EBITDA loss almost in half from the year-ago period. Its gross loss ratio sank to an all-time low of 62% while the gross loss ratio in its car coverage improved to 76%. Fintech Firm Raises Outlook After Q3 Earnings Lemonade raised its full-year revenue guidance to $727 million-$732 million. FactSet's consensus 2025 revenue estimate was $715.3 million. The insurer also forecast fourth-quarter revenue of $217 million-$222 million with in-force premium of $1.218 million-$1.223 million. In a letter to shareholders, the company underscored its car-insurance business, which saw improvement in the gross loss ratio. It is "delivering all that we could have hoped for," the company said. In-force premium grew 40% year over year. New York-based Lemonade aims to leverage artificial intelligence and Big Data to digitize rental, homeowner and other coverage. Its AI-led financial technology, i.e. fintech, can add multiple insurance products quickly and efficiently. Lemonade users are mostly under 35 and first-time buyers of insurance. Lemonade stock rallied above the 62 buy point of a cup-without-handle base. Because the stock gapped above the entry, a more suitable entry is the first five-minute high in Wednesday's trading, at 71.60. The stock was quoted around 71.50 in morning trading. The stock has an IBD Composite Rating of 61 and a 21-day average true range (ATR) of 6.75%. The average true range, available on IBD MarketSurge, gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves. Tobacco Firm Posts Q3 Earnings Turning Point Brands (TPB) jumped 5.5% after the tobacco products maker beat Q3 earnings and sales that exceeded all analysts' estimates. Sales rose 31.2% to $119.0 million, above FactSet's highest estimate of $114.3 million. Diluted EPS of $1.13 came in well above the top estimate of 73 cents a share. Adjusted diluted earnings climbed 15% to $1.05 per share. Louisville, Ky.-based Turning Point said its Modern Oral sales — its nicotine pouch business — rose 22% to $36.7 million from the previous quarter and 628% year over year. The Stoker's Products segment, which offers chewing tobacco and includes the pouch products, accounted for 63% of total sales. The Zig-Zag products segment, which makes the rolling paper often used for marijuana smoking, accounted for 37% of total sales. The segment's sales fell 10.5%. The company raised its full-year adjusted EBITDA guidance to $115-$120 million from $110-$114 million). The stock jumped above the 104.76 buy point of another cup-without-handle base, but shares faded below the entry in the morning session. Volume was on track for the highest in at least one year. Turning Point Brands has a Composite Rating of 94, the highest in IBD's tobacco industry group. Its ATR is 4.79%. YOU MAY ALSO LIKE
