Lemonade, Inc. (LMND): A Bull Case Theory

We came across a bullish thesis on Lemonade, Inc. (LMND) on Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on LMND. Lemonade, Inc. (LMND)’s share was trading at $28.11 as of April 7^th.

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Lemonade (LMND) stands out as one of the more tariff-resistant stocks, largely due to its revenue mix, which is concentrated in pet and renters insurance—areas unlikely to be meaningfully impacted by trade tensions or increased tariffs. In contrast, auto insurance companies face greater risks, given that higher vehicle repair costs, especially for imported parts, could increase payouts significantly. While there is some concern that expectations around LMND’s growing auto segment may be slightly overbaked, this exposure remains limited compared to its core offerings. Even with potential headwinds, LMND appears better positioned than peers like Root (ROOT), which is far more concentrated in auto insurance. This relative strength is already being reflected in market behavior, with LMND down 11% over the past five days compared to ROOT’s steeper 18% drop. Importantly, the recent decline in LMND’s stock has occurred on low volume, suggesting that it’s more a product of broader macroeconomic weakness than bearish sentiment specific to the company. With its diversified insurance portfolio and limited tariff exposure, LMND offers resilience in a potentially turbulent environment. The market’s response thus far supports the view that Lemonade’s business model is well-insulated from the brunt of the trade-related volatility facing other sectors.

Lemonade, Inc. (LMND) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held LMND at the end of the fourth quarter which was 16 in the previous quarter. While we acknowledge the risk and potential of LMND as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LMND but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.