Shares of Lemonade (NYSE: LMND) soured on Wednesday. The stock fell as much as 28.4% in the morning and stayed near this lower level throughout the day, showing extremely heavy trading volume. This harsh reaction to Lemonade's fourth-quarter earnings report wiped out a recent price spike as investors reset their expectations for Lemonade's near-term business prospects.

There wasn't anything wrong with the financials Lemonade reported yesterday. Lemonade's revenue rose by 31% year over year, landing at $115.5 million. Adjusted net losses shrank from $0.93 to $0.61 per diluted share. Your average analyst had expected a deeper loss of roughly $0.80 per share on revenue near $111.8 million.

The results also exceeded management's projections. From net losses and revenue to in-force insurance premiums and capital expenses, every metric with an official guidance range or target saw a more favorable result than expected.

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Source Fool.com