From Yahoo Finance: 2025-06-09 12:03:00

Lemonade, Inc. (LMND) has shown impressive scalability, with a 65% growth in in-force premium since 2022 while keeping operating expenses flat. The company’s AI-driven infrastructure allows for significant leverage, but the question remains if this AI can accurately price insurance risk compared to traditional players.

Lemonade’s unit economics are currently negative, but the trajectory is improving as they focus on scaling and building a proprietary dataset to power their AI models. CEO Dan Schreiber highlighted Lemonade’s real-time, AI-powered underwriting capabilities, setting them apart from other insurers.

Despite lacking a dense social graph, Lemonade’s decreasing gross loss ratio indicates improving underwriting precision. The company may evolve into a winner in AI-native insurance, but the negative cash flow introduces risks. The stock has seen a 15% appreciation recently, reinforcing confidence in its future potential.

Although Lemonade, Inc. (LMND) is not among the 30 most popular stocks among hedge funds, 22 hedge fund portfolios held LMND at the end of the first quarter. While the stock has potential, some AI stocks may offer higher returns with limited downside risk. Investors looking for an affordable AI stock benefiting from Trump tariffs can explore further in a free report.

Read more: Lemonade, Inc. (LMND): A Bull Case Theory