Is MetroMile a Good Digital Insurance Stock to Invest In? By

Shares of leading pay-per-mile auto insurer Metromile (MILE) plunged over the past month because of the company’s disappointing financial performance. Given its declining contribution margin and higher cancellation rates, will the stock be able to regain its ground? Read on.California-based technology startup Metromile, Inc. (MILE) offers pay-per-mile car insurance services and licenses a digital insurance platform in the United States and internationally. MILE’s stock declined 32% over the past month and 48.5% over the past three months. This can be primarily attributable to the pandemic-related challenges and several other business headwinds.

Although MILE has been making decent progress in enhancing its direct-to-consumer channels and state expansion to acquire new customers, the reduced demand for its pay-per-mile auto insurance and higher cancellation rates could hamper its near-term growth. The stock is currently trading 76.4% below its 52-week high of $4.81, which it hit on February 17.

The company lowered its previous guidance for the full year 2021. The bleak outlook and declining financials could lead to its stock witnessing further pullback in the upcoming months.

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