Should You Buy Lemonade (LMND) While It's Below $65?

Lemonade (NYSE: LMND), the online insurer that uses AI chatbots to onboard customers and process claims, went nationalist astatine $29 per stock successful July 2020. Today, its banal trades astatine astir $55 -- yet it's inactive beneath Wall Street's median terms people of $65. Should you bargain Lemonade's banal earlier it hits that price? Let's reappraisal its concern exemplary and maturation rates to marque a decision.

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Lemonade's digital-first attack attracted galore younger and first-time security buyers who were intimidated by the byzantine process of buying insurance. It initially offered lone homeowners and renters insurance, but expanded into the word life, favored health, and car security (via its acquisition of Metromile) markets aft its nationalist debut.

At the extremity of 2025, Lemonade served 2.98 cardinal customers, up from 1.00 cardinal astatine the extremity of 2020. Over the past 5 years, it consistently grew its in-force premium (IFP) and gross-earned premium (GEP) astatine precocious double-digit rates portion reducing its gross nonaccomplishment ratio. That unchangeable enlargement boosted its gross margins, but it's inactive unprofitable.

Data source: Lemonade. YOY = Year-over-year. TTM = Trailing 12 months.

However, Lemonade expects its adjusted net earlier interest, taxes, depreciation, and amortization (EBITDA) to crook affirmative (for astatine slightest a quarter) this twelvemonth arsenic its AI level trims its expenses and economies of standard footwear in. It besides expects its IFP to summation from $1.24 cardinal successful 2025 to astir $10 cardinal successful the "coming years".

From 2025 to 2027, analysts expect Lemonade's gross to turn astatine a 41% CAGR, with adjusted EBITDA turning affirmative successful the last year. With an endeavor worth of $4.5 billion, it inactive looks reasonably valued astatine 3.8 times this year's sales.

If Lemonade's banal rises 18% to $65, it would inactive commercialized astatine 4.4 times this year's sales. If it matches Wall Street's estimates successful 2028, and trades astatine a much generous 5 times guardant income by the opening of the year, its banal could emergence astir 130% implicit the adjacent 2 years.