Lemonade shares (NYSE:) fell nearly 3% on Tuesday pre-open despite better-than-expected Q1 revenues.

LMND suffered a $1.21 loss per share in this period, compared with a loss of 81 per share in the same period last. Revenue was $44.3million, an 89% increase YoY, and higher than analyst expectations of $43.3million.

According to consensus estimates, 1.5 million customers were served in the fourth quarter. The in-force premium was 419 million, compared with the $408 million analyst consensus.

LMND posted an adjusted EBITDA loss ($57.4 Million), up 39% YoY compared with the consensus projections of $66.7 millions. The estimated 85.1% gross loss ratio was reflected in a 90% gross loss ratio. Analysts had expected it to be 79.8%.

Tracy Benguigui (an analyst at Barclays) commented on the matter:

“Slightly improved ’22 guidance (ex MILE). Despite a disappointing 95% gross loss ratio, LMND managed to beat the 1Q22 guidance it provided. Comparing results to the same quarter last year is a low bar given TX winter storms in 1Q21,” Benguigui said in a client note.

BofA Analyst Joshua Shanker has become more pessimistic. He lowered his price target from $21.00 to $19.00 per Share, and reiterated an Underperform rating.

“While the stock has been on a long downward performance leg, we believe there is likely floor support around the $700-800mn price level. The company’s future profitable growth would be an upside risk. There is a downside risk to the company’s ability to pass time without raising capital through 2H23. No material upside in a high risk stock like LMND forms the basis of our Underperform rating,” Shanker told clients.

By Senad Karaahmetovic