LMND Should I Buy
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Lemonade Inc (LMND) is not a strong buy for a beginner investor with a long-term focus at this moment. While the company has shown strong revenue growth and positive momentum in its Q4 2025 financials, the technical indicators suggest a neutral to bearish trend. Insider selling and lack of significant trading trends further weaken the case for immediate investment. Additionally, the absence of Intellectia Proprietary Trading Signals and limited upside potential in the short term make it prudent to hold off on buying right now.
The MACD histogram is negative (-1.871) and contracting, indicating bearish momentum. RSI is at 27.564, suggesting no clear signal. Moving averages are converging, and the stock is trading near its key support level of 61.506. The technical indicators suggest a neutral to slightly bearish trend.
Strong Q4 2025 revenue growth of 53% YoY, reaching $228 million.
In-force premium increased by 31% YoY to $1.24 billion.
Analysts have raised price targets recently, with some highlighting Lemonade's AI-driven cost advantages and potential for EBITDA profitability by Q4 2026.
Insider selling has increased by 136.02% over the last month.
The stock experienced volatility following Q4 earnings, with a 13.9% surge followed by a 6.8% drop.
Net income and EPS have declined significantly YoY, with net income down -27.67% and EPS down -30.95%.
In Q4 2025, Lemonade reported a 53% YoY revenue increase to $228 million, driven by strong customer growth and higher in-force premiums. However, the company posted a net loss of $21.7 million, down 27.67% YoY, and EPS dropped to -$0.29, down 30.95% YoY. Despite revenue growth, profitability remains a challenge.
Analysts are generally optimistic about Lemonade's long-term potential, with recent upgrades and price target increases. Notable ratings include Truist's Buy rating with a $98 price target and Morgan Stanley's upgrade to Equal Weight with an $85 price target. However, some analysts remain cautious, with Keefe Bruyette maintaining an Underperform rating and a $40 price target.
