What Happened
Lemonade, Inc. (LMND) experienced a significant decline of 11.9% in its stock price today. This downturn follows the company’s Q4 earnings report, which, despite showing strong growth, raised concerns about future profitability.
Why It Matters
The company’s Q4 2025 revenue was reported at $228.1 million, with a net loss of $0.29 per share. Although the adjusted EBITDA loss narrowed to approximately $5 million and in-force premiums rose to about $1.24 billion, management’s guidance for 2026 indicates projected revenue of $1.187–$1.192 billion alongside an adjusted EBITDA loss of roughly $48–$52 million. This outlook suggests that while growth is occurring, significant investments will continue to hinder profitability in the near term.
What’s Next
Following the earnings report, Piper Sandler lowered its price target for Lemonade from $85 to $65, maintaining a Neutral stance on the stock. This adjustment reflects growing caution among analysts regarding the company’s profit trajectory, despite improvements in underwriting. Investors will be closely monitoring Lemonade’s performance in the upcoming quarters, particularly as the company anticipates an adjusted EBITDA loss of approximately $22–$25 million in Q1 2026.
