Lemonade (LMND) AI Stock Analysis

• Market Cap: $3.09B
• Dividend Yield: N/A
• Average Volume (3M): 2.59M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.01
• Revenue Growth: 21.44%
• EPS Growth: 2.99%
• Country: US
• Employees: 1,235
• Sector: Financial
• Sector Strength: 76
• Industry: Insurance - Property & Casualty
• EPS (TTM): -0.86
• Shares Outstanding: 73,266,170
• 10 Day Avg. Volume: 2,048,386
• 30 Day Avg. Volume: 2,588,759
• PEG Ratio: -0.18
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -5.13
• Enterprise Value/Market Cap: 0.21
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 3.10
• Enterprise Value/Ebitda: -0.85
• 1Y Price Target: $33.80
• Price Target Upside: -15.94% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6

• Rating: 52 Neutral
• Price Target: $43.00 ▲(6.94%Upside)

Lemonade's overall score is driven by robust revenue growth and a strong technical setup, indicating positive market momentum. However, significant challenges in profitability and unfavorable valuation metrics weigh heavily on the stock's appeal. While the earnings call provides a promising long-term outlook, the immediate focus must be on improving operational efficiency and financial stability.

Positive Factors

Earnings Performance

Efficiency improvements and topline uplift are expected to support overall earnings.

Revenue Growth

Retaining more premiums should uplift revenue as more premiums are kept within the company.

Negative Factors

Macro Environment

The uncertain macro environment and competitive market lead to a downgrade of Lemonade's stock from Equal-weight to Underweight.

Market Competition

Lemonade is looking to expand into a competitive and uncertain auto insurance market, which makes business growth more difficult.

Underwriting Margins

Lemonade's underwriting margins are significantly higher than its peers, indicating continued financial losses in underwriting.

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 makes money primarily through the premiums paid by its policyholders. The company employs an innovative business model where a fixed percentage of premiums is allocated to cover operating costs and profits, while the remaining funds are used to pay out claims. This structure is intended to align the company's interests with its customers, as surplus funds are donated to charitable causes chosen by policyholders. Lemonade utilizes advanced machine learning algorithms to streamline processes, reduce fraud, and enhance customer experience, which contributes to cost efficiency and competitive pricing. Significant partnerships with reinsurance providers help Lemonade manage risk and ensure financial stability, further supporting its revenue model.

Lemonade Financial Statement Overview

Summary

Lemonade shows significant revenue growth, but persistent losses and negative cash flow highlight the need for improvements in cost management and operational efficiency. The balance sheet is relatively strong with low leverage, but profitability and cash generation require attention.

Income Statement

Lemonade's income statement shows significant revenue growth, with total revenue increasing from $94.4 million in 2020 to $409.6 million in TTM 2025. However, the company has not achieved profitability, as evidenced by persistent negative net income and EBIT margins. The gross profit margin remains high, which is positive, but the negative net profit margin indicates a need to control operating expenses and improve efficiency.

Balance Sheet

The balance sheet reflects a strong equity position relative to debt, with a debt-to-equity ratio remaining low. However, stockholders' equity has decreased over time, and the return on equity is negative due to ongoing losses. The equity ratio remains stable, indicating a decent financial structure, but the company must address its continuous losses to enhance financial stability.

Cash Flow

Lemonade's cash flow statement shows negative free cash flow, although there is improvement in recent periods. The operating cash flow remains negative, highlighting challenges in generating cash from operations. The company has relied on financing activities to support its cash position. Improving free cash flow to net income ratio is essential for future financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	558.60M	526.50M	429.80M	256.70M	128.40M	94.40M
Gross Profit	207.00M	172.70M	90.20M	28.40M	22.90M	20.40M
EBITDA	-200.60M	-183.90M	-209.80M	-282.60M	-229.90M	-119.10M
Net Income	-217.30M	-202.20M	-236.90M	-297.80M	-241.30M	-122.30M
Balance Sheet
Total Assets	1.86B	1.85B	1.63B	1.69B	1.51B	828.70M
Cash, Cash Equivalents and Short-Term Investments	639.80M	376.00M	264.50M	1.03B	1.07B	577.40M
Total Debt	123.70M	107.20M	43.10M	35.20M	22.30M	0.00
Total Liabilities	1.31B	1.26B	924.40M	823.90M	522.30M	287.70M
Stockholders Equity	545.50M	593.40M	708.90M	866.80M	988.20M	541.00M
Cash Flow
Free Cash Flow	-38.00M	-20.80M	-128.30M	-173.10M	-154.00M	-96.10M
Operating Cash Flow	-28.80M	-11.40M	-119.10M	-163.00M	-144.60M	-91.70M
Investing Cash Flow	-30.60M	40.60M	88.70M	181.10M	-804.80M	50.10M
Financing Cash Flow	94.20M	87.70M	15.40M	3.60M	649.60M	341.10M

Lemonade Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 40.21
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LMND, the sentiment is Positive. The current price of 40.21 is below the 20-day moving average (MA) of 41.52, above the 50-day MA of 38.16, and above the 200-day MA of 33.87, indicating a neutral trend. The MACD of 0.44 indicates Positive momentum. The RSI at 52.58 is Neutral, neither overbought nor oversold. The STOCH value of 60.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LMND.

Lemonade Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SKWD	74 Outperform	$2.19B	17.66	16.03%	―	25.88%	9.45%
ROOT	70 Outperform	$2.11B	40.41	17.95%	―	98.66%	―
SAFT	69 Neutral	$1.09B	14.93	8.75%	5.03%	19.05%	40.69%
HCI	68 Neutral	$1.65B	13.82	28.75%	1.12%	20.89%	3.25%
Sector *	68 Neutral	$16.93B	11.67	9.79%	3.89%	11.83%	-7.56%
STC	65 Neutral	$1.63B	22.48	5.31%	3.43%	11.40%	73.12%
LMND	52 Neutral	$3.09B	―	-35.57%	―	21.44%	2.99%

Lemonade Corporate Events

Lemonade Announces New Reinsurance Program Terms

Lemonade, Inc. announced the terms of its reinsurance program effective from July 1, 2025, to June 30, 2026, involving a reduction in the ceded proportion of its quota share reinsurance from approximately 55% to 20%. This strategic move is expected to maintain a variable ceding commission rate similar to previous agreements, potentially impacting the company’s financial strategy and stakeholder interests.

The most recent analyst rating on (LMND) stock is a Hold with a $44.00 price target. To see the full list of analyst forecasts on Lemonade stock, see the LMND Stock Forecast page.

Lemonade Elects New Directors at Annual Meeting

On June 4, 2025, Lemonade held its annual meeting of stockholders, with 68.41% of the voting power represented. During the meeting, Shai Wininger and Dr. Samer Haj-Yehia were elected as Class II Directors until 2028. Additionally, the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025 was ratified, and the compensation of the company’s named executive officers was approved on a non-binding basis.

The most recent analyst rating on (LMND) stock is a Hold with a $44.00 price target. To see the full list of analyst forecasts on Lemonade stock, see the LMND Stock Forecast page.