Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 6 Mar, 26 | LMND | Buy | USD 55.04 | USD 58.0 | USD 61.0 | 11 days | Closed |
13.43%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
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, car, pet, 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.
Expansion in Customer Base and Premium Portfolio: Total customers increased to 2,984,513 in FY25, up from 2,430,056 in FY24, while in-force premium expanded to USD 1,236.5 million in FY25 compared with USD 943.7 million in FY24
Significant Improvement in Underwriting Performance: Gross loss ratio declined to 64% in FY25 from 73% in FY24, while the net loss ratio improved to 65% in FY25 compared with 75% in FY24
Slight Decline in Customer Retention: The company experienced a marginal decline in annual dollar retention, which decreased to 85% in FY25 from 86% in FY24
Higher Sales and Marketing Spending: Sales and marketing expenses rose significantly to USD 224.4 million in FY25, compared with USD 166.3 million in FY24
LMND is exposed to the risk that rapid growth and underwriting improvements do not translate into sustained profitability due to competitive pricing pressure, catastrophe volatility, reinsurance availability, and regulatory constraints
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 55.04 | 49.0 | 58.0 | 61.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Continued Investment in Growth and Platform Development: Operating expenses increased as the company continued investing in customer acquisition, technology infrastructure, and product expansion initiatives. Total expenses rose to USD 898.8 million in FY25 from USD 730.4 million in FY24, with sales and marketing expenses increasing to USD 224.4 million in FY25 compared with USD 166.3 million in FY24, reflecting higher customer acquisition investments.
Core Insurance Revenue Expansion: The company continued to scale its insurance operations during FY25, with net earned premium increasing to USD 536.3 million in FY25 compared with USD 370.6 million in FY24. At the same time, ceding commission income increased to USD 122.7 million in FY25 from USD 91.1 million in FY24, reflecting higher premium volumes and an expanding insurance portfolio supported by reinsurance arrangements.
Improvement in Net Loss Reflecting Progress Toward Profitability: Despite continued investments in expansion, the company reported an improvement in overall profitability metrics. Net loss narrowed to USD 165.5 million in FY25 from USD 202.2 million in FY24, supported by stronger revenue growth, improved underwriting performance, and expanding gross profit margins.
Product Momentum and Data Flywheel Reinforcement: FY25 performance was also shaped by strong product-level execution in growth and underwriting. The shareholder letter emphasized structural drivers—Pet sustaining mid-50s IFP growth and reporting 2025 cost per claim of USD 14, Europe achieving 150% IFP growth alongside an improved TTM gross loss ratio of 74% (improved by 16 percentage points vs Q4’24), and Car improving conversion rates by as much as 60% and ending FY25 with a TTM gross loss ratio of 70% (a 23-point YoY improvement).
FY25 reinforced Lemonade’s operating narrative: the company expanded revenue meaningfully, improved core underwriting metrics, and translated those gains into substantially higher gross profit while narrowing losses. With product/geography drivers (Pet, Europe, Car) continuing to scale and AI-enabled efficiency supporting operating leverage, the business appears positioned to compound unit economics as it grows. Henceforth, based on potential valuation upside, trading levels, and company's improving performance in the recent financial year, a ‘Buy’ recommendation on the stock at the closing market price of USD 55.04, as of March 05, 2026.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Insurance - Property & Casualty
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) |
|---|---|---|---|---|---|---|---|
| LMND Lemonade Inc |
1.56 2.72% | 58.84 | - | - | 2.98 | 1.62 | 2.45 |
| CB Chubb Ltd |
-4.56 1.39% | 323.40 | 12.85 | 12.20 | 2.16 | 1.74 | 2.48 |
| PGR Progressive Corp |
0.45 0.22% | 204.87 | 34.22 | 20.33 | 1.55 | 5.46 | 1.70 |
| ALL The Allstate Corporation |
-0.49 0.22% | 221.17 | 5.68 | 8.60 | 0.83 | 1.94 | 0.96 |
| TKOMF Tokio Marine Holdings Inc. |
- -% | 45.87 | 14.81 | 10.00 | 0.0069 | 1.59 | 0.0064 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on March 6, 2026. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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