Lemonade (LMND) AI Stock Analysis

• Market Cap: $3.90B
• Dividend Yield: N/A
• Average Volume (3M): 2.82M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.48
• Revenue Growth: 30.53%
• EPS Growth: 21.82%
• Country: US
• Employees: 1,235
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): -0.29
• Shares Outstanding: 74,731,026
• 10 Day Avg. Volume: 3,486,665
• 30 Day Avg. Volume: 2,817,730
• PEG Ratio: 1.49
• Price to Book (P/B): 9.86
• Price to Sales (P/S): 7.13
• P/FCF Ratio: -203.22
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 5.02
• Enterprise Value/Gross Profit: 13.83
• Enterprise Value/Ebitda: -23.87
• 1Y Price Target: $68.50
• Price Target Upside: 32.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): -1.71
• Revenue Forecast (FY): $1.19B

• Rating: 50 Neutral
• Price Target: $52.00 ▲(0.29% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is held back primarily by still-weak financial performance (ongoing net losses, negative free cash flow for the full year, and declining equity) and bearish technicals (price below key moving averages with negative momentum). These are partly offset by a strong earnings-call outlook pointing to accelerating growth, improving margins/cash generation, and a defined path toward EBITDA profitability.

Positive Factors

Revenue Growth & Scale

Sustained multi-year top-line acceleration and expanding in-force premium signal a compounding scale advantage. Growing policy counts and IFP expand Lemonade's data pool, improving AI pricing and segmentation durability that supports long-term unit-economics improvement and market share gains.

Improving Gross Margins

Large year-over-year gross profit and margin expansion point to improving underwriting and pricing effectiveness. Higher gross margins are structural: better unit economics create reinvestment capacity for growth and increase the probability of sustained progress to EBITDA and eventual GAAP profitability.

Liquidity & Marketing Efficiency

A sizable cash position plus regulatory surplus provides runway to fund R&D and scaled growth. Demonstrated marketing efficiency (LTV/CAC >3x) and recent positive adjusted free cash flow quarters indicate the business can grow without immediate refinancing, supporting a durable path toward self-funded expansion.

Negative Factors

Persistent GAAP Losses & Equity Erosion

Ongoing GAAP losses and declining shareholder equity reflect multi-year value erosion and negative returns on equity (~-31% in 2025). This reduces the firm's buffer against underwriting shocks, limits capital flexibility, and increases reliance on external funding until consistent GAAP profitability is achieved.

Full‑Year Negative Free Cash Flow

Although operating cash burn has improved materially, annual free cash flow remained negative, implying the company is not yet self-funding its growth. Continued negative FCF prolongs dependence on existing liquidity or capital markets, and could constrain investment pacing if cash generation stalls.

Rising OpEx & Reserve Reliance

Rapidly increasing operating and growth spend pressures near-term margins; some underwriting improvement was aided by favorable prior-period reserve development. If reserve tailwinds reverse or elevated spend continues, margin gains may be transitory and slow the path to sustainable profitability.

Lemonade Business Overview & Revenue Model

Company Description

Lemonade, Inc. provides various insurance products in the United States and Europe. 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, pet, car, 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.

How the Company Makes Money

Lemonade generates revenue primarily through the sale of insurance policies, charging customers premiums that vary based on the type of coverage selected. The company employs a unique business model where it retains a fixed percentage of the premiums, which is then used to cover operational costs and claims. Any leftover funds after claims are paid out are allocated to charitable causes chosen by the policyholders through the company's Giveback program. Additionally, Lemonade earns revenue from reinsurance arrangements, where it transfers some of its risk to other insurance entities, allowing it to manage large claims while maintaining a stable financial foundation. Strategic partnerships with reinsurers and technology providers also contribute to its revenue stream by enhancing its underwriting capabilities and expanding its market reach.

Lemonade Financial Statement Overview

Summary

Financials show strong multi-year revenue growth and improving losses, plus much lower operating cash burn versus 2021–2022. However, profitability remains negative, free cash flow is still negative on the full year, equity has declined over time, and 2025 has missing/zero gross profit and operating profit fields that reduce visibility into core underwriting/expense efficiency.

Income Statement

Revenue growth is solid over time, with total revenue rising from $94.4M (2020) to $737.9M (2025), including 12.0% growth in 2025 (annual). Profitability is improving but still weak: net losses narrowed to -$165.5M in 2025 from -$202.2M in 2024 and -$297.8M in 2022, and the net margin improved materially to about -22% in 2025 versus roughly -38% in 2024. However, margins remain negative and 2025 shows missing/zero gross profit and operating profit fields, limiting visibility into underwriting/expense efficiency and making earnings quality harder to assess.

Balance Sheet

The balance sheet is conservatively levered: debt-to-equity was modest in 2024 (~0.18) and total debt is shown as $0 in 2025, which reduces financial risk. Equity remains meaningful at ~$533.6M in 2025 against ~$1.93B in assets. The key weakness is persistent value erosion from losses, reflected in consistently negative returns on equity (about -31% in 2025 and ~-34% in 2024), and equity has trended down from ~$988.2M (2021) to ~$533.6M (2025).

Cash Flow

Cash burn has improved significantly versus prior years: operating cash flow was -$16.5M in 2025 and -$11.4M in 2024, much better than -$163.0M in 2022 and -$144.6M in 2021. Free cash flow is still negative (-$25.9M in 2025; -$20.8M in 2024), and 2025 free cash flow declined versus 2024 (about -21% growth), signaling that the path to sustained self-funding operations is not yet secured. While free cash flow is less negative than net income in recent years, the company remains dependent on maintaining liquidity until profitability improves.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	737.90M	526.50M	429.80M	256.70M	128.40M
Gross Profit	0.00	172.70M	90.20M	28.40M	22.90M
EBITDA	0.00	-183.90M	-209.80M	-282.60M	-229.90M
Net Income	-165.50M	-202.20M	-236.90M	-297.80M	-241.30M
Balance Sheet
Total Assets	1.93B	1.85B	1.63B	1.69B	1.51B
Cash, Cash Equivalents and Short-Term Investments	396.80M	1.01B	937.70M	1.03B	1.07B
Total Debt	0.00	107.20M	43.10M	35.20M	22.30M
Total Liabilities	1.39B	1.26B	924.40M	823.90M	522.30M
Stockholders Equity	533.60M	593.40M	708.90M	866.80M	988.20M
Cash Flow
Free Cash Flow	-25.90M	-20.80M	-128.30M	-173.10M	-154.00M
Operating Cash Flow	-16.50M	-11.40M	-119.10M	-163.00M	-144.60M
Investing Cash Flow	-89.10M	40.60M	88.70M	181.10M	-804.80M
Financing Cash Flow	106.60M	87.70M	15.40M	3.60M	649.60M

Lemonade Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 51.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LMND, the sentiment is Negative. The current price of 51.85 is below the 20-day moving average (MA) of 69.64, below the 50-day MA of 76.31, and below the 200-day MA of 57.60, indicating a bearish trend. The MACD of -7.30 indicates Positive momentum. The RSI at 30.10 is Neutral, neither overbought nor oversold. The STOCH value of 9.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LMND.

Lemonade Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLMR	77 Outperform	$3.21B	16.94	23.58%	―	54.41%	52.71%
PGR	76 Outperform	$120.84B	10.72	―	2.20%	18.35%	32.36%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
ROOT	61 Neutral	$896.21M	19.59	17.02%	―	38.50%	―
KMPR	56 Neutral	$1.83B	13.65	9.03%	3.15%	4.51%	-8.29%
LMND	50 Neutral	$3.90B	-21.82	-31.34%	―	30.53%	21.82%

Lemonade Corporate Events

Lemonade Metromile merger warrants near February 2026 expiry

Lemonade, Inc., which operates a technology-focused consumer insurance platform, issued 7,846,646 warrants with an exercise price of $218.51 as part of its November 8, 2021 merger agreement with Metromile, Inc. These Lemonade warrants, listed on the NYSE under the LMND-WS ticker, are scheduled to expire on February 9, 2026 at 5:00 p.m. Eastern Time, and the exchange has notified the company that trading in the warrants will be suspended after the market close on February 5, 2026 to allow for timely settlement ahead of expiration, affecting warrant holders’ remaining window to exercise or trade these instruments.

The most recent analyst rating on (LMND) stock is a Hold with a $101.00 price target. To see the full list of analyst forecasts on Lemonade stock, see the LMND Stock Forecast page.