Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 11 May, 26 | LMND | Buy | USD 55.69 | USD 58.5 | USD 62.0 | 49 days | Closed |
11.73%
|
*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.
Increase in In Force Premium: USD 1,333.2 Mn in Q1FY26 vs USD 1,007.8 Mn in Q1FY25
Growth in Total Revenue: USD 258.0 Mn in Q1FY26 vs USD 151.2 Mn in Q1FY25
Increase in Borrowings Under Financing Agreement: USD 179.6 Mn in Q1FY26 vs USD 158.1 Mn in FY25
Increase in Sales and Marketing Expense: USD 66.1 Mn in Q1FY26 vs USD 43.2 Mn in Q1FY25
Key Investment Risk: Lemonade remains exposed to underwriting volatility, catastrophe-related claims, intense competition in the insurance industry, regulatory risks, and uncertainties associated with scaling its AI-driven pricing and claims management models
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 55.69 | 50.0 | 58.5 | 62.0 |
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.
Accelerated Topline Growth and Expanding Customer Base: Lemonade, Inc. (NYSE: LMND) delivered a strong Q1FY26 performance, supported by continued acceleration in topline growth and expanding customer adoption. In-force premium (IFP) increased 32% YoY to USD 1.33 billion, marking the company’s tenth consecutive quarter of accelerating IFP growth. Revenue rose sharply by 71% YoY to USD 258.0 million, primarily driven by higher premium retention and continued growth in gross earned premium. Customer count also increased 23% YoY to more than 3.14 million.
Improved Profitability and Operating Leverage: The company reported significant improvement in profitability metrics during Q1FY26, reflecting stronger underwriting performance and operating leverage. Gross profit surged 159% YoY to USD 100.1 million, while gross profit margin expanded to 39% from 26% in Q1FY25. Adjusted EBITDA loss narrowed substantially to USD 17.1 million compared with a loss of USD 47.0 million in the prior-year period. Net loss also improved 43% YoY to USD 35.8 million, highlighting continued progress toward profitability targets.
AI-Driven Efficiency Supports Scalable Operations: Lemonade continued leveraging artificial intelligence and automation to improve operational efficiency and scalability. Since late 2022, the company has more than doubled IFP while reducing employee count by approximately 6%, resulting in IFP per employee exceeding USD 1 million. Management indicated that AI-powered automation has enabled improved customer support quality and business scalability without proportional increases in headcount, supporting long-term margin expansion opportunities across the insurance platform.
Pet Insurance Business Achieves Major Milestone: The pet insurance segment emerged as a key growth driver during the quarter, surpassing USD 500 million in IFP early in Q2FY26. Lemonade highlighted that its pet business has become the fourth-largest carrier by written premium in the U.S. market. The company attributed this growth to its AI-powered pricing capabilities, automation-driven cost advantages, diversified distribution model, and strong customer acquisition efficiency. Management also stated that the business continues growing at more than three times the industry average growth rate.
Lemonade Car Demonstrates Strong Momentum: Lemonade Car continued to record strong traction during Q1FY26, with IFP growing 60% YoY, representing its fastest growth rate to date. The company maintained healthy underwriting performance with a 74% gross loss ratio despite accelerated expansion. Recently launched markets, including Colorado, contributed meaningfully to growth momentum. Management also noted encouraging adoption trends for its autonomous car product, with customer conversion rates approximately 70% higher than comparable non-autonomous offerings, supporting future geographic expansion plans.
Strong Cash Position and Improving Cash Flow Metrics: The company maintained a healthy liquidity profile during Q1FY26, with cash, cash equivalents, and investments totaling approximately USD 1.14 billion as of March 31, 2026. Adjusted free cash flow improved significantly to a positive USD 17.4 million, compared with negative USD 31.0 million in Q1FY25. Operating cash flow was nearly breakeven at negative USD 0.6 million, reflecting a notable improvement from negative USD 47.2 million in the prior-year quarter, supported by improved operational execution and higher revenue generation.
Positive Outlook Supported by Upgraded FY26 Guidance: Management raised FY26 guidance across several financial metrics, reflecting confidence in business momentum and underwriting trends. Lemonade expects FY26 IFP in the range of USD 1.63 billion to USD 1.64 billion and revenue between USD 1.20 billion and USD 1.20 billion. The company reiterated expectations of achieving positive adjusted EBITDA during Q4FY26. Continued investment in AI-driven underwriting, marketing efficiency, and customer cross-selling initiatives is expected to support sustainable long-term growth and profitability improvement.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Lemonade, Inc. (NYSE: LMND) at the current market price of USD 55.69, as on 11 May,2026 at 11:00 am PDT.
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 |
-0.62 0.92% | 66.83 | - | - | 2.98 | 1.62 | 2.45 |
| CB Chubb Ltd |
2.09 0.59% | 354.62 | 12.85 | 12.20 | 2.16 | 1.74 | 2.48 |
| PGR Progressive Corp |
-5.475 2.58% | 206.75 | 34.22 | 20.33 | 1.55 | 5.46 | 1.70 |
| ALL The Allstate Corporation |
-3.65 1.44% | 250.08 | 5.68 | 8.60 | 0.83 | 1.94 | 0.96 |
| TKOMF Tokio Marine Holdings Inc. |
2.38 5.21% | 48.05 | 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 May 11, 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.
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Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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