Piper Sandler Lowers Lemonade Price Target to $65 Amid Profit Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy LMND?
Source: stocktwits
- Price Target Adjustment: Piper Sandler has lowered Lemonade's price target from $85 to $65 while maintaining a ‘Neutral’ rating, indicating a 13.4% upside from the last closing price of $57.31, reflecting market caution regarding the company's core profit growth.
- Earnings Forecast: Lemonade forecasts its adjusted EBITDA for 2026 to be between $48 million and $52 million, and despite improvements in underwriting and automation, analysts express concerns about the company's progress towards profitability targets, suggesting potential cost pressures.
- AI-Driven Growth: Lemonade has been utilizing its AI-powered insurance operating system, Blender, to enable claim adjusters to handle three times the claim volume, with AI applications now reflected across nearly all lines of the profit and loss statement, and marketing expenditures tripling due to AI-driven segmentation and pricing enhancements.
- Market Sentiment Shift: Retail sentiment on Lemonade surged from ‘neutral’ to ‘extremely bullish’ over the past week according to Stocktwits data, although users highlight profitability as a key challenge, the stock has gained nearly 63% over the last 12 months.
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Analyst Views on LMND
Wall Street analysts forecast LMND stock price to rise
6 Analyst Rating
2 Buy
3 Hold
1 Sell
Hold
Current: 61.670
Low
40.00
Averages
77.60
High
98.00
Current: 61.670
Low
40.00
Averages
77.60
High
98.00
About LMND
Lemonade, Inc. offers renters, homeowners, car, pet, and life insurance. The Company operates through the United States, Europe, including the United Kingdom, providing insurance products to customers through various sales channels. The Company's digital substrate enables it to integrate marketing and onboarding with underwriting and claims processing, collecting, and deploying data. Its technology includes Data Advantage, AI Maya, AI Jim, CX.AI, Forensic Graph, Blender, and Cooper. AI Maya, its onboarding and customer experience bot, uses natural language to guide customers in joining the Company. AI Jim, its claims bot, takes the first notice of loss from its customer without human intervention. It offers pet insurance that covers diagnostics, procedures, medication, accidents or illness. Even its basic pet insurance offering covers blood tests, urinalysis, lab work, and computed tomography scans.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Lemonade's Positive Outcomes Stimulate Market Interest: Recovery on the Horizon
Strong Q4 Results: Lemonade's Q4 2026 results exceeded expectations, indicating potential for future growth and a rebound in stock price, supported by a solid revenue increase of over 50% year-over-year.
User Growth and Service Improvement: The company's AI-enabled insurance platform attracted new users, enhancing its offerings and operational quality, which is expected to further improve service delivery.
Positive Financial Forecast: Lemonade forecasts $1.187 billion in revenue for 2026, significantly above analyst consensus, with anticipated growth drivers including client and premium increases across various markets.
Market Sentiment and Stock Performance: Analysts maintain a bullish outlook on Lemonade, with a majority rating it as a "Hold" and a price target of $70, suggesting the stock is fairly valued and poised for potential gains.
See More
Piper Sandler Lowers Lemonade Price Target to $65 Amid Profit Concerns
- Price Target Adjustment: Piper Sandler has lowered Lemonade's price target from $85 to $65 while maintaining a ‘Neutral’ rating, indicating a 13.4% upside from the last closing price of $57.31, reflecting market caution regarding the company's core profit growth.
- Earnings Forecast: Lemonade forecasts its adjusted EBITDA for 2026 to be between $48 million and $52 million, and despite improvements in underwriting and automation, analysts express concerns about the company's progress towards profitability targets, suggesting potential cost pressures.
- AI-Driven Growth: Lemonade has been utilizing its AI-powered insurance operating system, Blender, to enable claim adjusters to handle three times the claim volume, with AI applications now reflected across nearly all lines of the profit and loss statement, and marketing expenditures tripling due to AI-driven segmentation and pricing enhancements.
- Market Sentiment Shift: Retail sentiment on Lemonade surged from ‘neutral’ to ‘extremely bullish’ over the past week according to Stocktwits data, although users highlight profitability as a key challenge, the stock has gained nearly 63% over the last 12 months.
See More
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- Market Milestone: Berkshire Hathaway has surpassed a market cap of $1 trillion, becoming one of only two non-tech companies to achieve this, highlighting its strong market position and influence.
- Diversified Portfolio: The company owns around 190 wholly or partially owned companies across various sectors, including furniture, paints, and batteries, forming a $320 billion equity portfolio that enhances its resilience against market fluctuations.
- Insurance Business Strength: As one of its main industries, Berkshire's ownership of brands like GEICO means that the float from insurance premiums is a crucial part of its operating model, ensuring stable cash flow and profitability.
- Digitalization Challenges: Despite its strengths in the insurance sector, executives have noted that the company is falling behind in digitalization compared to younger competitors like Lemonade, indicating challenges in adapting to a rapidly changing market environment.
See More
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- Insurance Business Model: Berkshire Hathaway operates its entire holding company using the float from its insurance business, owning brands like GEICO, with insurance float being a crucial part of its operational model, showcasing its strength in the insurance sector.
- Digital Competitive Edge: Lemonade, as an emerging digital insurance company, stands out among traditional insurers due to its highly connected digital platform; despite its smaller size, it is growing faster than legacy giants and is projected to achieve adjusted EBITDA profitability this year.
- Young Customer Base: Lemonade appeals to a younger generation of customers, and as they buy homes and cars, it expects further growth, with in-force premiums increasing by 31% year-over-year in Q4 2025, indicating strong market demand.
- Investment Considerations: While Lemonade shows robust growth potential, it operates under a completely different model than Berkshire Hathaway, prompting investors to consider their investment goals and risk tolerance, as Lemonade could serve as a growth engine in a long-term portfolio.
See More
Lemonade, Inc. Reports Record Q4 2025 Earnings with Strong Growth
- Record Quarterly Performance: Lemonade achieved revenue of $228 million in Q4 2025, reflecting a 53% year-over-year increase, marking the ninth consecutive quarter of accelerating growth and demonstrating strong execution in core business segments.
- Improved Profitability: Gross profit surged 73% to $111 million year-over-year, while adjusted EBITDA loss narrowed significantly to $5 million, indicating substantial progress in cost control and profitability enhancement.
- Strong Customer Growth: The company added approximately 550,000 new customers in 2025, driving a 31% year-over-year increase in in-force premium to $1.24 billion, reflecting Lemonade's growing competitiveness and market appeal.
- Optimistic Future Outlook: Management expects to achieve EBITDA profitability in Q4 2026 and for the full year 2027, showcasing confidence in future growth and a continued commitment to investments in AI and product innovation.
See More
Lemonade's Strong Earnings Report Leads to Stock Volatility
- Impressive Earnings: In Q4 2025, Lemonade's in-force premiums rose 31% year-over-year to $1.24 billion, with revenues increasing 53% to $228 million and gross profit soaring 73% to $111 million, indicating strong business growth potential.
- Narrowing Net Loss: Although the company reported a net loss, it shrank from $0.42 to $0.29 per share, and free cash flow increased from $27 million to $37 million, reflecting improvements in financial health.
- Market Reaction Volatile: Despite exceeding Wall Street analysts' expectations, the stock surged 13.9% at the open before plummeting 6.8%, highlighting market concerns over high valuations, particularly with Lemonade's price-to-sales ratio at 8.9, significantly above the industry average of 1.4.
- Optimistic Future Outlook: Management issued revenue guidance for the next quarter above market expectations and set a breakeven target for fiscal year 2027, indicating potential for future growth despite the market's lukewarm response to its data-driven growth targets.
See More
Lemonade's Positive Outcomes Stimulate Market Interest: Recovery on the Horizon
Strong Q4 Results: Lemonade's Q4 2026 results exceeded expectations, indicating potential for future growth and a rebound in stock price, supported by a solid revenue increase of over 50% year-over-year.
User Growth and Service Improvement: The company's AI-enabled insurance platform attracted new users, enhancing its offerings and operational quality, which is expected to further improve service delivery.
Positive Financial Forecast: Lemonade forecasts $1.187 billion in revenue for 2026, significantly above analyst consensus, with anticipated growth drivers including client and premium increases across various markets.
Market Sentiment and Stock Performance: Analysts maintain a bullish outlook on Lemonade, with a majority rating it as a "Hold" and a price target of $70, suggesting the stock is fairly valued and poised for potential gains.
See More
Piper Sandler Lowers Lemonade Price Target to $65 Amid Profit Concerns
- Price Target Adjustment: Piper Sandler has lowered Lemonade's price target from $85 to $65 while maintaining a ‘Neutral’ rating, indicating a 13.4% upside from the last closing price of $57.31, reflecting market caution regarding the company's core profit growth.
- Earnings Forecast: Lemonade forecasts its adjusted EBITDA for 2026 to be between $48 million and $52 million, and despite improvements in underwriting and automation, analysts express concerns about the company's progress towards profitability targets, suggesting potential cost pressures.
- AI-Driven Growth: Lemonade has been utilizing its AI-powered insurance operating system, Blender, to enable claim adjusters to handle three times the claim volume, with AI applications now reflected across nearly all lines of the profit and loss statement, and marketing expenditures tripling due to AI-driven segmentation and pricing enhancements.
- Market Sentiment Shift: Retail sentiment on Lemonade surged from ‘neutral’ to ‘extremely bullish’ over the past week according to Stocktwits data, although users highlight profitability as a key challenge, the stock has gained nearly 63% over the last 12 months.
See More
Berkshire Hathaway Surpasses $1 Trillion Market Cap
- Market Milestone: Berkshire Hathaway has surpassed a market cap of $1 trillion, becoming one of only two non-tech companies to achieve this, highlighting its strong market position and influence.
- Diversified Portfolio: The company owns around 190 wholly or partially owned companies across various sectors, including furniture, paints, and batteries, forming a $320 billion equity portfolio that enhances its resilience against market fluctuations.
- Insurance Business Strength: As one of its main industries, Berkshire's ownership of brands like GEICO means that the float from insurance premiums is a crucial part of its operating model, ensuring stable cash flow and profitability.
- Digitalization Challenges: Despite its strengths in the insurance sector, executives have noted that the company is falling behind in digitalization compared to younger competitors like Lemonade, indicating challenges in adapting to a rapidly changing market environment.
See More
Berkshire Hathaway vs. Lemonade: A Comparative Analysis
- Insurance Business Model: Berkshire Hathaway operates its entire holding company using the float from its insurance business, owning brands like GEICO, with insurance float being a crucial part of its operational model, showcasing its strength in the insurance sector.
- Digital Competitive Edge: Lemonade, as an emerging digital insurance company, stands out among traditional insurers due to its highly connected digital platform; despite its smaller size, it is growing faster than legacy giants and is projected to achieve adjusted EBITDA profitability this year.
- Young Customer Base: Lemonade appeals to a younger generation of customers, and as they buy homes and cars, it expects further growth, with in-force premiums increasing by 31% year-over-year in Q4 2025, indicating strong market demand.
- Investment Considerations: While Lemonade shows robust growth potential, it operates under a completely different model than Berkshire Hathaway, prompting investors to consider their investment goals and risk tolerance, as Lemonade could serve as a growth engine in a long-term portfolio.
See More
Lemonade, Inc. Reports Record Q4 2025 Earnings with Strong Growth
- Record Quarterly Performance: Lemonade achieved revenue of $228 million in Q4 2025, reflecting a 53% year-over-year increase, marking the ninth consecutive quarter of accelerating growth and demonstrating strong execution in core business segments.
- Improved Profitability: Gross profit surged 73% to $111 million year-over-year, while adjusted EBITDA loss narrowed significantly to $5 million, indicating substantial progress in cost control and profitability enhancement.
- Strong Customer Growth: The company added approximately 550,000 new customers in 2025, driving a 31% year-over-year increase in in-force premium to $1.24 billion, reflecting Lemonade's growing competitiveness and market appeal.
- Optimistic Future Outlook: Management expects to achieve EBITDA profitability in Q4 2026 and for the full year 2027, showcasing confidence in future growth and a continued commitment to investments in AI and product innovation.
See More
Lemonade's Strong Earnings Report Leads to Stock Volatility
- Impressive Earnings: In Q4 2025, Lemonade's in-force premiums rose 31% year-over-year to $1.24 billion, with revenues increasing 53% to $228 million and gross profit soaring 73% to $111 million, indicating strong business growth potential.
- Narrowing Net Loss: Although the company reported a net loss, it shrank from $0.42 to $0.29 per share, and free cash flow increased from $27 million to $37 million, reflecting improvements in financial health.
- Market Reaction Volatile: Despite exceeding Wall Street analysts' expectations, the stock surged 13.9% at the open before plummeting 6.8%, highlighting market concerns over high valuations, particularly with Lemonade's price-to-sales ratio at 8.9, significantly above the industry average of 1.4.
- Optimistic Future Outlook: Management issued revenue guidance for the next quarter above market expectations and set a breakeven target for fiscal year 2027, indicating potential for future growth despite the market's lukewarm response to its data-driven growth targets.
See More
