Key Points
Lemonade (NYSE: LMND) stock isn’t having a great year. The insurance technology company’s stock is down 7% year-to-date after skyrocketing 341% between 2024 and 2025.
But I think it could reach $100 next year, implying a 40% increase from today’s price. Here’s why.
A different kind of insurance company
When Lemonade opened its virtual doors just about a decade ago, it set out to create a different kind of insurance company. The two main ways it differentiates itself are its digital foundation and its status as a certified B-Corp, which means it has a social mission. It allows customers to donate some of their funds to nonprofits through its “giveback” program.
That attracts a certain kind of customer, but these days it’s a tech-first, artificial intelligence-driven business attracting hundreds of thousands of new users who are just looking for a better insurance experience.
Growth has been phenomenal over the 10 years Lemonade has been in business, and it’s recently been accelerating. The 2026 first quarter was the 10th consecutive quarter of accelerating in-force premium (IFP), which measures the amount of policy premium “in force” at a given time and is the standard top-line metric for insurance companies. It increased 32% year over year in the first quarter. Revenue is growing even faster, up 71% in the quarter.
The company added almost 600,000 new customers over the trailing 12 months, a 23% increase, to 3.1 million in the first quarter, and premium per customer was up 7% to $424, implying that its cross-sell strategy is working.
What will change in 2027?
Since Lemonade has gotten its loss ratio under control, the stock has soared. Its next big goal is to become profitable, and it’s getting closer. Management is guiding to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turning positive by the end of this year and net income turning positive next year.
If it can reach those goals, the stock is likely to reflect that, and it can continue to rise without becoming more expensive. Right now, Lemonade stock trades at 6.8 times trailing-12-month sales. If sales continue to grow at current rates, Lemonade stock can gain 70% without becoming more expensive. If it becomes profitable while maintaining high growth rates, it should easily surpass $100 next year.
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Jennifer Saibil has positions in Lemonade. The Motley Fool has positions in and recommends Lemonade. The Motley Fool has a disclosure policy.
