Lemonade (NYSE:LMND) & Goosehead Insurance (NASDAQ:GSHD) Financial Contrast

Lemonade (NYSE:LMND) and Goosehead Insurance (NASDAQ:GSHD) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Lemonade and Goosehead Insurance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lemonade	3	2	5	0	2.20
Goosehead Insurance	2	5	7	0	2.36

Lemonade presently has a consensus target price of $64.89, indicating a potential upside of 10.34%. Goosehead Insurance has a consensus target price of $65.09, indicating a potential upside of 38.88%. Given Goosehead Insurance’s stronger consensus rating and higher probable upside, analysts clearly believe Goosehead Insurance is more favorable than Lemonade.

Volatility & Risk

Lemonade has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500. Comparatively, Goosehead Insurance has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Profitability

This table compares Lemonade and Goosehead Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lemonade	-16.44%	-26.52%	-7.18%
Goosehead Insurance	7.94%	-20.96%	8.50%

Earnings and Valuation

This table compares Lemonade and Goosehead Insurance”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lemonade	$737.90 million	6.12	-$165.50 million	($1.87)	-31.45
Goosehead Insurance	$365.30 million	4.57	$27.83 million	$1.14	41.11

Goosehead Insurance has lower revenue, but higher earnings than Lemonade. Lemonade is trading at a lower price-to-earnings ratio than Goosehead Insurance, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

80.3% of Lemonade shares are owned by institutional investors. 14.7% of Lemonade shares are owned by company insiders. Comparatively, 38.1% of Goosehead Insurance shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Goosehead Insurance beats Lemonade on 10 of the 14 factors compared between the two stocks.

About Lemonade

Lemonade, Inc. provides various insurance products through various channels in the United States, Europe, and the United Kingdom. Its insurance products include stolen or damaged property, and personal liability that protects its customers if they are responsible for an accident or damage to another person or their property. The company also offers renters, homeowners, car, pet, and life insurance products, as well as landlord insurance policies. In addition, it operates as an agent for other insurance companies. The company was formerly known as Lemonade Group, Inc. and changed its name to Lemonade, Inc. Lemonade, Inc. was incorporated in 2015 and is headquartered in New York, New York.

About Goosehead Insurance

Goosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that engages in the provision of personal lines insurance agency services in the United States. The company offers homeowner’s, automotive, dwelling property, flood, wind, earthquake, excess liability or umbrella, motorcycle, recreational vehicle, general liability, property, and life insurance products and services. As of December 31, 2023, it operated 1,415 franchise locations. The company was founded in 2003 and is headquartered in Westlake, Texas.