Insurance technology company Lemonade (LMND 1.31%) has finally made the comeback I've been talking about for far too long. Its stock is up 174% over the past year, rewarding investors who have waited patiently for it to rebound.
And this growth story is far from over. Lemonade is still down a whopping 73% from its 2021 all-time high, despite its recent gains, and it could be a standout financial stock.
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Leading with AI
When Lemonade opened its virtual doors in 2015, artificial intelligence (AI) was a long way from capturing market attention like it does today. Even when it became a public company in 2020, touting its algorithms and machine learning, AI was not a driving trend in the stock market. In 2025, every company that wants to keep up with technology is using AI, but Lemonade has an edge because it already has a decade of data and experience.
Those who looked at Lemonade as a risky proposition in a space dominated by legacy insurers, some of which are literally more than a century old, may now realize that Lemonade's digital platform, connectivity, and AI give it a leg up in the industry.
Management notes that while there are plenty of newcomers trying to replicate what Lemonade has created, they can't match the platform it has already built with 10 years of data and improvements.
The traditional insurers are now eager to bring AI into their businesses too, but they're still wrapped up in decades-old models that aren't so easy to move to new, more agile systems. Lemonade is much smaller than these traditional insurers, but it's growing much faster, and it's expecting to hit breakeven in the next two years. In the 2025 second quarter, in-force premium increased 29% year over year, an acceleration, and it added more than half a million new customers, a 24% increase. As it attracts new, young customers with its all-digital experience, it has a real chance to become a leader in the insurance industry.
