Alright, folks, gather ’round! We’re diving into Lemonade (LMND +4.92%). Yes, that Lemonade. The one that thought disrupting insurance with chatbots was a good idea. It went public back in July 2020 at $29 a share. A bold move, I tell ya. A bold move. And the stock? Oy, the stock! It’s been doing the tango ever since, up, down, sideways…it’s enough to give you a migraine. Now it’s around $55. The question is, will this volatile concoction deliver sweet returns by 2030, or will it turn sour? Don’t answer that. I’m asking me.
What Happened to Lemonade Over the Past Five Years?
Lemonade, see, they simplified buying insurance. Attracted all the youngsters, the first-timers. Smart! They started with homeowners and renters, then expanded into term life, pet health, and even auto insurance. Because why not? It’s like opening a deli and deciding, “You know what this needs? Rocket science!” They served 2.98 million customers by the end of 2025, nearly triple the 1.00 million they had in 2020. Still tiny compared to the insurance behemoths like Allstate (ALL +1.21%), who serve over 16 million households. Plenty of room to grow, folks. Plenty of room. Though, I’m telling you, competing with those guys is like bringing a squirt gun to a tank battle.
Lemonade, like all insurance companies, judges success by customer numbers, in-force premiums (IFP), and gross earned premiums (GEP). It’s all very…mathematical. They also look at the gross loss ratio (must stay under 100%, naturally) and adjusted gross margin (should expand as they scale up). All these metrics improved over the last five years. A good sign! Though, my Aunt Mildred always said, “Numbers can lie, darling. Especially when accountants are involved.” And she was a CPA!
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Customer Growth (YOY) | 56% | 43% | 27% | 12% | 20% | 23% |
| IFP Growth (YOY) | 87% | 78% | 64% | 20% | 26% | 31% |
| GEP Growth (YOY) | 110% | 84% | 68% | 37% | 23% | 28% |
| Gross Loss Ratio (TTM) | 71% | 90% | 90% | 85% | 73% | 64% |
| Adjusted Gross Margin | 33% | 36% | 25% | 23% | 33% | 41% |
What Will Happen to Lemonade Over the Next Five Years?
So, in their investor day presentation back in November 2024, Lemonade predicted they’d grow their IFP to $10 billion. Ten billion! That’s a lot of premiums. Compared to $944 million in 2024 and $1.24 billion in 2025. They also expect their adjusted EBITDA – which has been in the red since they went public – to turn green sometime in 2026. Finally! Though, I’ve seen more color changes in a chameleon. Analysts expect revenue to grow at a 46% CAGR from 2025 to 2027, with adjusted EBITDA turning positive in the final year. With an enterprise value of $4.2 billion, the stock still looks reasonably valued at 3.5 times this year’s sales. A steal, I tell ya! A steal!
If Lemonade hits those targets, grows sales at a slower 25% CAGR through 2030, and trades at a more generous five times sales, the stock could more than triple by the final year. It could hit that target as long as they keep attracting new customers, expanding their platform, and building a moat against the big boys. Now, if you’ll excuse me, I need to go invest in a good umbrella. You never know when it’s going to rain…or when another disruptive insurance company will come along.
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2026-02-26 20:02