Lemonade Stock Skyrockets Over 9% Today – Here’s Why

Lemonade (LMND) shares surged more than 9% in a single trading session—leaving traditional insurers scrambling to keep up with the AI-driven disruptor.

The catalyst? Speculation’s swirling, but Wall Street’s betting on another quarter of explosive growth. Because nothing says 'innovation' like a fintech firm burning cash to reinvent the wheel.

Short squeeze or sustainable momentum? The bulls are charging, but remember: even the juiciest lemonade turns sour eventually.

Boosting the buy case

Of the pair, one was an initiation of coverage, and the other a price target increase by a researcher that's been following Lemonade stock for some time.

Image source: Getty Images.

The initiating individual was Cantor Fitzgerald's Ryan Tunis, who after market close Tuesday launched coverage of Lemonade with an overweight (buy, in other words) recommendation. Tunis set his price target at $60 per share for the stock.

The following day,' Andrew Andersen raised his existing price target on the shares. He now believes they are worth $37 apiece, quite some distance north of his previous $30 estimation. That was the good news for Lemonade; the bad is that Andersen left his underperform (sell) rating unchanged.

According to reports, the analyst's bump was due in no small to the company's higher premium retention; this should spur revenue growth for the company. On the down side, Andersen expressed concern that Lemonade was taking on more leverage, an activity that can hamper fundamentals if not managed effectively.

Not yet tasting good

While Lemonade is an innovative company in numerous ways, personally I'd be concerned about its propensity for bottom-line losses. Until and when it can prove that it can not only book a profit but do so with some consistency, I will remain wary of the stock.