MILE - Metromile: Weaker Q2 And Lower Outlook Sent Shares Down 20%
- Q2 results saw Metromile's growth stalling and its losses widening as it struggled to cope with the fading of COVID-19 benefits.
- 2021 outlook was revised downwards significantly, with policies in force now expected to grow by just 8% year-on-year.
- We are concerned by the use of commission-based agents, the absence of reinsurance cover and the lack of growth at Metromile Enterprise.
- At $5.63, even after a 20% fall in after-market trading, shares are trading at 6.7x Premiums in Force, leaving a little margin of safety.
- Metromile's business model is now more unproven than before, and its valuation remains outside our parameters. Avoid.
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Metromile: Weaker Q2 And Lower Outlook Sent Shares Down 20%