Lemonade (NYSE:LMND) Releases Quarterly Earnings Results, Beats Estimates By $0.12 EPS

Lemonade (NYSE:LMND) announced its quarterly earnings results on Thursday. The company reported ($0.29) EPS for the quarter, beating analysts’ consensus estimates of ($0.41) by $0.12, FiscalAI reports. Lemonade had a negative return on equity of 31.86% and a negative net margin of 26.39%.The company had revenue of $228.10 million during the quarter, compared to analysts’ expectations of $218.07 million. During the same period in the prior year, the business posted ($0.42) EPS. Lemonade’s revenue was up 53.3% on a year-over-year basis.

Here are the key takeaways from Lemonade’s conference call:

• Company reported strong operating momentum with in‑force premium of $1.24 billion (+31% YoY), revenue +53%, gross profit +73% to $111 million, adjusted EBITDA loss narrowed to $5 million and adjusted free cash flow of $37 million, and management reiterated EBITDA profitability in Q4 2026 and full‑year 2027.
• Launched Lemonade Autonomous Car (initially for Teslas) using telematics that price by mode (park/human/AI); the company says Tesla FSD miles are >50% safer and are currently priced at about 50% of human‑driven miles, which could lower rates and customer acquisition costs over time.
• Growth spend ramped materially (Q4 growth spend $53 million, +48% YoY; plan for ~$225 million in growth spend for the year) while marketing efficiency stayed strong with an LTV:CAC above 3x, signaling management will continue to trade near‑term investment for faster top‑line expansion.
• Management is investing heavily in AI, a “pricing machine,” cross‑sell platform, and a local platform, arguing Lemonade’s decade of proprietary data and AI‑first culture provide a durable competitive edge versus legacy incumbents.
• Balance sheet and capital positioning appear supportive of growth with roughly $1.1 billion in cash and investments (about $250 million held as regulatory surplus) and a capital‑light reinsurance/captive structure that management says can support ambitious expansion.

Lemonade Price Performance

Shares of LMND traded down $2.91 during midday trading on Friday, hitting $58.76. The stock had a trading volume of 943,438 shares, compared to its average volume of 2,584,130. The firm has a market cap of $4.39 billion, a price-to-earnings ratio of -24.67 and a beta of 2.03. The company has a 50 day simple moving average of $77.90 and a two-hundred day simple moving average of $66.08. Lemonade has a twelve month low of $24.31 and a twelve month high of $99.90.

Insider Transactions at Lemonade

In related news, COO Adina Eckstein sold 41,557 shares of the stock in a transaction dated Monday, December 8th. The stock was sold at an average price of $78.95, for a total transaction of $3,280,925.15. Following the completion of the transaction, the chief operating officer directly owned 204,229 shares in the company, valued at approximately $16,123,879.55. This trade represents a 16.91% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider John Sheldon Peters sold 10,000 shares of the business’s stock in a transaction that occurred on Tuesday, January 6th. The shares were sold at an average price of $80.00, for a total value of $800,000.00. Following the completion of the sale, the insider owned 60,771 shares in the company, valued at $4,861,680. The trade was a 14.13% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 250,540 shares of company stock valued at $22,007,574 over the last three months. 14.70% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the business. Caitong International Asset Management Co. Ltd increased its stake in Lemonade by 8,080.0% in the 4th quarter. Caitong International Asset Management Co. Ltd now owns 409 shares of the company’s stock valued at $29,000 after buying an additional 404 shares during the last quarter. Northwestern Mutual Wealth Management Co. bought a new position in shares of Lemonade in the 4th quarter valued at about $33,000. Strive Financial Group LLC acquired a new stake in shares of Lemonade in the fourth quarter valued at about $38,000. Macquarie Group Ltd. bought a new stake in Lemonade during the fourth quarter worth about $63,000. Finally, NewEdge Advisors LLC bought a new stake in Lemonade during the first quarter worth about $35,000. Institutional investors own 80.30% of the company’s stock.

Key Headlines Impacting Lemonade

Here are the key news stories impacting Lemonade this week:

• Positive Sentiment: Q4 beat — Lemonade reported EPS of ($0.29) vs. consensus ($0.41) and revenue of $228.1M (up ~53% YoY), showing meaningful top- and bottom-line beats that underpin the rally earlier in the session. Business Wire: Q4 Results
• Positive Sentiment: Upgraded guidance — Management raised revenue guidance for Q1 and FY2026 (Q1: $246–$251M vs. consensus ~$237.6M; FY: ~ $1.2B vs. ~$1.1B consensus) and pushed forward its profitability timeline (positive adjusted EBITDA by year-end, profitable in 2027), a key catalyst for investors. MarketBeat: Guidance & Outlook
• Positive Sentiment: Operational momentum — Premiums, customers and margins showed strength: gross earned premium and in‑force premium improved, gross margin widened ~500 bps, and free cash flow turned positive ($37M), supporting the thesis of improving unit economics. Blockonomi: Quarter Summary
• Neutral Sentiment: Options flow showed heavier bullish positioning (≈21,181 calls traded, ~15% above avg), which amplified intraday moves but also increases short‑term volatility. (Options flow reported by market data providers.)
• Neutral Sentiment: Earnings call transcript available — management commentary and Q&A (see full transcript for color on pricing, underwriting and margin path). Seeking Alpha: Call Transcript
• Negative Sentiment: Underwriting cleanup — Average daily retained revenue (ADR) declined ~1% due to non‑renewals of poorer risk policies; this improves portfolio quality but is a near‑term headwind to growth/mix. MarketBeat: Quality vs. ADR
• Negative Sentiment: Still unprofitable and volatile — net margins remain negative, ROE is negative, and high short interest (~18%) plus heavy institutional ownership create outsized swings; after the post‑earnings pop some investors are taking profits, weighing on the stock today. MarketBeat: Volatility & Short Interest

Analyst Ratings Changes

Several equities research analysts have weighed in on the stock. Morgan Stanley set a $85.00 target price on shares of Lemonade and gave the stock an “equal weight” rating in a report on Tuesday, December 16th. Cantor Fitzgerald upped their price objective on shares of Lemonade from $85.00 to $92.00 and gave the company an “overweight” rating in a research report on Wednesday, January 14th. Citigroup reaffirmed an “outperform” rating on shares of Lemonade in a research note on Friday, January 16th. Keefe, Bruyette & Woods boosted their target price on Lemonade from $35.00 to $40.00 and gave the company an “underperform” rating in a research note on Tuesday, November 25th. Finally, Citizens Jmp set a $80.00 price target on Lemonade in a report on Monday, November 24th. Four equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and three have given a Sell rating to the company’s stock. According to data from MarketBeat.com, Lemonade presently has a consensus rating of “Hold” and an average target price of $71.71.

Lemonade Company Profile

Lemonade, Inc (NYSE: LMND) is a New York–based technology-driven insurance carrier that leverages artificial intelligence and behavioral economics to streamline the purchase and management of policies. Founded in 2015, the company offers renters, homeowners, pet, term life and car insurance products tailored for digitally savvy consumers. By automating underwriting and claims processing through chatbots and machine learning, Lemonade aims to deliver a more transparent and user-friendly experience than traditional insurers.

The company’s product suite includes standalone policies for renters and homeowners, customizable pet insurance plans, and term life coverage with simple online applications.