What happened

It was a sleepy morning for news, but that didn't stop shares of insurance company Lemonade (NYSE:LMND) from resuming their march higher on Friday. As of 1:15 p.m. EDT, the stock was up 7%. But it had traded hands a full 16% higher earlier in the session.

While there weren't any noteworthy developments today, it's understandable why investors like Lemonade stock the more they get acquainted with it. Here's some things to like.

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Image source: Getty Images.

So what

Lemonade just had its initial public offering (IPO) this month, so it hasn't had time to build a track record with investors. And the company's currently in a quiet period, so don't expect forthcoming press releases. Right now, investors are relying entirely on information that was already available before today. 

I expect investors are encouraged by Lemonade's corporate culture. Consider that workplace-review company Glassdoor shows 94% of = Lemonade employees surveyed would recommend the workplace to a friend. And CEO Daniel Schreiber has 97% approval. Those are high marks suggesting a strong culture -- one of the factors worth considering when investing in stocks.

Lemonade's revenue growth is also stellar. Full-year 2019 revenue grew 201% year over year to $63.8 million as the company chases the massive insurance market opportunity. The company reported a huge loss of $109 million in 2019 (mostly sales and marketing expenses) but there's reason to think its artificial-intelligence technology can make it more profitable in time.

For example, Lemonade says its competitors can only serve 150 to 450 customers per employee. By contrast, Lemonade believes its technology makes it more efficient; it's currently able to serve more than 2,000 customers per employee. That's a lot of operating leverage gained as it grows.

Now what

I'm not saying one should rush out to buy Lemonade stock today. It's easy to get swept away with buzz phrases like "artificial intelligence" and huge addressable markets. But there's much more to consider with an investment. For example, Lemonade is a homeowner and renter insurance company. Renters insurance is vulnerable to high churn rates compared to other forms of insurance, and Lemonade's churn rate isn't disclosed in its prospectus.

In other words, I understand the investor enthusiasm surrounding Lemonade stock. But it's important to not emotionally follow the crowd. Objectively assess all the risks.