Please ensure Javascript is enabled for purposes of website accessibility

Why Has Lemonade Stock Been So Volatile?

By Brian Withers – Oct 2, 2021 at 8:15AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

And what does the future hold for this new player in the insurance industry?

Insurance technology company Lemonade (LMND 0.79%) exploded after its initial public offering in July 2020. The stock has stumbled significantly since, but does that performance mean the investment thesis has changed?

In this video from "The 5" on Motley Fool Live, recorded on Sept. 23, Fool.com contributor Brian Withers discusses why this stock has been on such a wild ride, and whether or not he thinks it's still worth holding onto. 

 

10 stocks we like better than Lemonade, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Lemonade, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of September 17, 2021

 

Brian Withers: I'm going to talk a little bit about kind of a popular one among Fools is Lemonade. [laughs] It certainly went up and was beating the market for a while and then it kind of crashed down. A lot of that has to do with, I think it's just an early stage company and they still have a lot to prove and I think some of the run-up in the stock was more of kind of what Brian Feroldi likes to call price-to-hope ratio where there's a lot of potential here and Lemonade could absolutely capture a huge market and be at 10-bagger over the long term, but sometimes, investors have shorter windows than it actually takes companies to go in and make accomplishments and get into new markets over time. I think the stock has sold off a good bit. I want to say 40% off its high maybe, but to me, the same reason I invested in it six, eight months ago soon after it went public, it still seems to be all the same thesis and all the right things are happening. It's just it's going to take a while for it really to flow through to kind of top-line growth, as well as once they get into Lemonade auto which I think is a huge opportunity for it, that isn't even yet approved.

Lots of growth levers here, the stock is down but totally not out, and so that's the one that I'm sticking with even though the market has kind of sold it off.

Brian Withers owns shares of Lemonade, Inc. The Motley Fool owns shares of and recommends Lemonade, Inc. The Motley Fool has a disclosure policy.

Stocks Mentioned

Lemonade Stock Quote
Lemonade
LMND
$19.14 (0.79%) $0.15

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

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.