Lemonade, Inc

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Lemonade, Inc (NYSE: LMND) is a digital insurance provider offering renters, homeowners, car, pet, and life insurance across the United States and Europe, including the United Kingdom. The company operates through a technology-driven platform that integrates marketing, onboarding, underwriting, and claims processing while continuously leveraging data to improve efficiency. Its proprietary technologies include Data Advantage, AI Maya, AI Jim, CX.AI, Forensic Graph, Blender, and Cooper. AI Maya supports customer onboarding and interactions using natural language, while AI Jim manages the initial claims reporting process without human intervention. Lemonade also provides pet insurance covering diagnostics, procedures, medications, accidents, and illnesses, with even its basic plans including services such as blood tests, urinalysis, laboratory analysis, and CT scans.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock experienced a strong upward trend through most of the past year, rallying from the USD 24–25 range to a peak near USD 99.9, indicating strong momentum and investor optimism. However, the recent decline from the peak signals a corrective phase following the extended rally.
• The stock is currently trading below both the 20-day moving average (USD 60.36) and the 50-day moving average (USD 73.18). This positioning reflects short-term technical weakness and suggests that near-term momentum remains under pressure unless the price reclaims these averages.
• The RSI is around 43, indicating that the stock is neither overbought nor oversold but remains in a weak momentum zone. The slight upward movement in RSI suggests early signs of stabilization after the recent decline.
• Elevated trading volumes during the recent decline suggest that the pullback may have been driven by profit-taking following the strong rally earlier in the year rather than a structural deterioration in sentiment.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~ 36.09% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc. and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at 8.23% and 5.50%, respectively.

1.4 Key Metrics:

Scaling Premium Growth and Improving Underwriting Economics Drive Lemonade’s Revenue Expansion (FY21–FY25)

The trends shown in the chart primarily reflect Lemonade’s rapid expansion in premium generation, evolving reinsurance structure, improvements in underwriting performance, and changes in investment income. Gross premiums written increased consistently from FY21 to FY25 as the company expanded its customer base, increased average premium per customer, and broadened its product portfolio across renters, homeowners, pet, car, and life insurance while expanding geographically. Total premiums earned also rose steadily, although at a slower pace, because insurance premiums are recognized over the life of the policy and therefore lag growth in written premiums; this increase was further supported by higher net retained premiums under revised reinsurance arrangements. Net investment income grew significantly from FY21 to FY23 due to improved portfolio returns and higher yields on invested assets such as cash, treasury securities, and corporate debt, before moderating in FY24 and FY25 as the incremental benefit from rising yields stabilized. Meanwhile, underwriting and commission income increased overall as the insurance book scaled and commission income from reinsurance arrangements expanded, although it experienced a temporary moderation around FY23 due to higher claims costs, catastrophe events, inflationary pressures on losses, and higher net retained risk following changes in proportional reinsurance participation. The subsequent improvement in FY24 and FY25 reflects better underwriting performance, improved loss ratios, stronger pricing discipline, and continued growth in premium volumes, which together strengthened underwriting economics and commission income.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Business Updates

2.2 Insights of FY25:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock experienced a strong upward trend through most of the past year, rallying from the USD 24–25 range to a peak near USD 99.9, indicating strong momentum and investor optimism. However, the recent decline from the peak signals a corrective phase following the extended rally.
• The stock is currently trading below both the 20-day moving average (USD 60.36) and the 50-day moving average (USD 73.18). This positioning reflects short-term technical weakness and suggests that near-term momentum remains under pressure unless the price reclaims these averages.
• The RSI is around 43, indicating that the stock is neither overbought nor oversold but remains in a weak momentum zone. The slight upward movement in RSI suggests early signs of stabilization after the recent decline.
• Elevated trading volumes during the recent decline suggest that the pullback may have been driven by profit-taking following the strong rally earlier in the year rather than a structural deterioration in sentiment.

 4.2 Fundamental Valuation

Valuation Methodology: Price/Book Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 05, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.