10Y annualized return is
negative
at -6.5% per year
LMND has met or exceeded earnings expectations in
most
recent quarters (9/10)
Strong Gross Profit Margin
Positive Operating Profit Margin
Low Debt Levels
📈 Strong Financial Performance
🔒 Effective Risk Management
🤖 AI-Driven Efficiency
🌟 Growth Guidance
🚗 Auto Insurance Expansion
🔄 Cross-Selling Opportunities
Negative Price Ratios Indicate Overvaluation
High EV/EBITDA Indicates Potential Overvaluation
Negative Net Profit Margin
Negative Returns on Equity
Severe Liquidity Issues
⚠️ Moderate Growth Spend
Lemonade demonstrates strong business quality with robust financial performance, effective risk management, and innovative AI-driven operations. Future prospects are promising with anticipated growth rates and expansion into the auto insurance market, although growth spend management may pose short-term challenges.
Analysis Date: February 26, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Lemonade, Inc. is a company that sells different types of insurance to help protect people from unexpected problems. They offer insurance for things like renters and homeowners, as well as protection for pets, cars, and even life. If something gets stolen or damaged, or if someone accidentally hurts another person, Lemonade helps cover the costs. The company started in 2015 and is based in New York.
Core Products
Business Type
Business to Consumer
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
LMND: No Graham value data available
Margin of Safety
Gap between intrinsic value and market price
LMND: No margin of safety data available
Graham Criteria Checklist
Benjamin Graham's value investing checklist for LMND
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (-9.89)
P/B ratio ≤ 1.5 (3.37)
Current ratio ≥ 2.0 (6.50x)
Long-term debt < Net current assets (0.07x)
Margin of safety
LMND does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
-32.38%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-29)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
100.00%
Higher values indicate better efficiency in production
TTM (as of 2025-04-29)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
-38.40%
Higher values indicate better overall profitability
TTM (as of 2025-04-29)
The gross profit margin of 100% indicates that the company retains all revenue after the cost of goods sold, which is a positive indicator of its pricing power.
The operating profit margin of 9.53% indicates that the company is able to generate some profit from its operations, despite the net losses.
The net profit margin of -38.40% indicates that the company is currently generating significant losses after all expenses, which raises concerns about profitability sustainability.
The return on equity of -32.38% suggests that the company is not effectively using shareholders' equity to generate profits, which is a significant concern for investors.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.18x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
6.50x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The debt to equity ratio of 0.18 and debt to assets ratio of 0.06 indicate that the company maintains a low level of debt, which can be a sign of financial stability.
With a current ratio, quick ratio, and cash ratio all at 0.0, the company appears to have no liquid assets to cover its current liabilities, raising serious concerns about its ability to meet short-term obligations.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Lemonade reported its best quarter ever in Q4 2024 with a 26% growth in in-force premiums (IFP) and a significant improvement in gross loss ratio to 63%, showcasing financial health and operational efficiency.
The company's conservative underwriting strategy and strong reinsurance programs have positioned it well against significant losses from catastrophic events, as demonstrated by the manageable impact of the California wildfires.
Lemonade leverages AI to improve customer service and operational efficiencies, enabling rapid claims processing and operational scalability.
Lemonade anticipates sustained IFP growth of 28% for 2025, with a target to reach a cruising velocity in the 30s by 2026, indicating strong future growth potential.
The launch of its auto insurance product, supported by a waitlist of over 700,000 potential customers, positions Lemonade for significant growth in a competitive market.
The potential for cross-selling car insurance to existing customers could enhance customer lifetime value and improve efficiency in customer acquisition.
While growth spend is expected to increase, the rate of spending may not accelerate in line with revenue growth, which could limit rapid scaling in the short term.
