Lemonade Inc

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Lemonade Inc (NYSE: LMND) offers a range of insurance products, including renters, homeowners, auto, pet, and life insurance. It serves customers in the United States and Europe, including the UK, and distributes its services through various sales channels.

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:

• 21-day MA is currently at USD 38.95 which is trending upward and is above the 50-day MA (USD 33.60), signaling a bullish alignment. Notably, 50-day MA is also rising, indicating mid-term strength. Current price of USD 41.10 is above both MAs, suggesting the uptrend remains intact.
• The RSI is at 56.2, having declined from overbought territory (>70). This indicates cooling momentum but still resides in bullish-neutral territory, leaving room for either consolidation or further downside.
• Volume spiked during the recent run-up but has since moderated. The latest decline was on relatively low volume (2.65M), which suggests the sell-off might not have strong conviction yet.    

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~ 48.39% of the total shareholding, signifying concentrated shareholding. SoftBank Group Corp and The Vanguard Group, Inc are the biggest shareholders, holding the maximum stake in the company at 14.27% and 8.36%, respectively.

1.4 Key Metrics:

The graph shows a steady increase in revenue from Q1 FY24 (USD 119.1 million) to Q1 FY25 (USD 151.2 million), mainly attributed to higher gross earned premiums, increased ceding commission income, and stronger net investment income Despite this growth, the company consistently reported net losses each quarter, peaking at USD -67.7 million in Q3 FY24 and narrowing to USD -30.0 million in Q4 FY24 before rising again to USD -62.4 million in Q1 FY25. This is due to higher growth-related expenses and the effects of the California wildfires and FAIR Plan assessment, partially offset by increased revenue.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Business Updates

2.2 Insights of Q1FY25:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• 21-day MA is currently at USD 38.95 which is trending upward and is above the 50-day MA (USD 33.60), signaling a bullish alignment. Notably, 50-day MA is also rising, indicating mid-term strength. Current price of USD 41.10 is above both MAs, suggesting the uptrend remains intact.
• The RSI is at 56.2, having declined from overbought territory (>70). This indicates cooling momentum but still resides in bullish-neutral territory, leaving room for either consolidation or further downside.
• Volume spiked during the recent run-up but has since moderated. The latest decline was on relatively low volume (2.65M), which suggests the sell-off might not have strong conviction yet.

 4.2 Fundamental Valuation

Valuation Methodology: Price/Book Value per share 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 June 25, 2025. 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.