What happened
The stock market was having a mixed day on Monday, with the Nasdaq Composite modestly higher and the Dow Jones Industrial Average and S&P 500 both in the red.
Insurance technology company Lemonade (LMND +0.88%) was a big outperformer. As of 11:20 a.m. EST, the recently public insurance disruptor was up by 17% and was trading at a fresh all-time high.
Image source: Getty Images.
So what
There doesn't seem to be any company-specific news propelling Lemonade higher. Rather, this appears to be a continuation of last week's sharp rally in the stock. Last week alone, Lemonade's stock price increased by nearly 70%, fueled by analyst recommendations and investor optimism about the company's growth potential.
Lemonade recently announced that it plans to expand into France and also plans to test a life insurance product by February, which could dramatically expand its addressable market. Currently, Lemonade primarily sells renters and homeowners insurance, as well as pet insurance. Life insurance is a $800 billion market, so this could be a major needle-mover.
Now what
Since going public in July, Lemonade has seen its stock price rise by more than 240%. And it's not hard to see why. Annual premium collections nearly doubled year over year in the third quarter, and the company's customer count grew by 67%. That's pretty impressive growth momentum in an insurance industry that's just begging to be disrupted. If Lemonade can keep its momentum alive and eventually capture a significant share of the $5 trillion global insurance market, the stock could still end up being a long-term bargain at its new higher share price.
