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Why Shares of Lemonade Are Up Today

By Bram Berkowitz – Aug 6, 2021 at 11:23AM

Key Points

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After the market didn't take to the company's earnings report late Wednesday, analysts maintained their bullish outlook on the company in several new research reports today.

What happened

Shares of the artificial intelligence insurance platform Lemonade (LMND 0.79%) traded as much as 4.5% higher this morning after multiple analysts on Friday assigned the company a bullish rating.

So what

The company recently reported an earnings per share loss of $0.90 on total revenue of $28.2 million in the second quarter of 2021. EPS was in line with analysts' estimates, while revenue beat the consensus for the quarter of $26.8 million.

Following earnings, Lemonade stock dropped roughly 11% Thursday, as the loss the company reported in the quarter more than doubled from the second quarter of 2020, while revenue dipped slightly as well.

Today, however, a group of analysts reinstated their bullish outlook on Lemonade. Analysts at Oppenheimer raised their price target from $85 per share to $95, while assigning the company an outperform rating. Analysts at Piper Sandler cut their price target from $103 per share to $98, but maintained a similar overweight rating on the stock. Lemonade currently trades around $80.64 per share.

Two glasses of Lemonade surrounded by lemons on a table.

Image source: Getty Images.

Now what

Lemonade has been a volatile stock, and already has given up much of its initial gains earlier today. But the company is a disruptor in the extremely large insurance market, which generates $5 trillion in premiums annually.

Management at Lemonade believes its specific opportunity is $400 billion, and the company is preparing to jump into the auto insurance space, which could make up a lot of that market opportunity, so I do see a bright future for this company.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Lemonade, Inc. The Motley Fool has a disclosure policy.

Stocks Mentioned

Lemonade Stock Quote
$19.14 (0.79%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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