Should You Buy Lemonade (LMND) While It's Below $65?

By Leo Sun – Mar 7, 2026 at 1:06PM ESTKey PointsLemonade’s stock has nearly doubled since its IPO.It will continue to gain more customers as it expands its AI-driven ecosystem.Lemonade (LMND +0.22%), the online insurer that uses AI chatbots to onboard customers and process claims, went public at $29 per share in July 2020. Today, its stock trades at about $55 -- yet it's still below Wall Street's median price target of $65. Should you buy Lemonade's stock before it hits that price? Let's review its business model and growth rates to make a decision. Image source: Getty Images. How fast is Lemonade growing? Lemonade's digital-first approach attracted many younger and first-time insurance buyers who were intimidated by the byzantine process of buying insurance. It initially offered only homeowners and renters insurance, but expanded into the term life, pet health, and auto insurance (via its acquisition of Metromile) markets after its public debut. ExpandNYSE: LMNDLemonadeToday's Change(0.22%) $0.12Current Price$55.16Key Data PointsMarket Cap$4.2BDay's Range$52.81 - $56.8052wk Range$24.31 - $99.90Volume76KAvg Vol2.7M At the end of 2025, Lemonade served 2.98 million customers, up from 1.00 million at the end of 2020. Over the past five years, it consistently grew its in-force premium (IFP) and gross-earned premium (GEP) at high double-digit rates while reducing its gross loss ratio. That stable expansion boosted its gross margins, but it's still unprofitable. Metric 2020 2021 2022 2023 2024 2025 Customer Growth (YOY) 56% 43% 27% 12% 20% 23% IFP Growth (YOY) 87% 78% 64% 20% 26% 31% GEP Growth (YOY) 110% 84% 68% 37% 23% 28% Gross Loss Ratio (TTM) 71% 90% 90% 85% 73% 64% Adjusted Gross Margin 33% 36% 25% 23% 33% 41% Data source: Lemonade. YOY = Year-over-year. TTM = Trailing 12 months. However, Lemonade expects its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive (for at least a quarter) this year as its AI platform trims its expenses and economies of scale kick in. It also expects its IFP to increase from $1.24 billion in 2025 to about $10 billion in the "coming years". From 2025 to 2027, analysts expect Lemonade's revenue to grow at a 41% CAGR, with adjusted EBITDA turning positive in the final year. With an enterprise value of $4.5 billion, it still looks reasonably valued at 3.8 times this year's sales. Will Lemonade's stock rise to $65 and beyond? If Lemonade's stock rises 18% to $65, it would still trade at 4.4 times this year's sales. If it matches Wall Street's estimates in 2028, and trades at a more generous five times forward sales by the beginning of the year, its stock could rise nearly 130% over the next two years. That could easily outperform the S&P 500's average annual return of 10%. Still, investors should keep a close eye on its stock-based compensation expenses (which accounted for 8% of revenue in 2025) and its share count (which has risen 39% since its IPO). That said, Lemonade could still have a bright future -- as long as it keeps pulling younger customers away from conventional insurers while steadily expanding its ecosystem with new policies and features.Read NextMar 5, 2026 •By Jack DelaneyLemonade Stock Dropped by 36% in February. Here's What Happened.Mar 4, 2026 •By Matt Frankel, CFPLemonade: Reasons to Buy and Reasons to SellMar 3, 2026 •By Jennifer SaibilCan Lemonade Stock Get to $100?Feb 28, 2026 •By Matt Frankel, CFPDown 20% in February, Is Lemonade Stock a Buy Now?Feb 26, 2026 •By Leo SunWhere Will Lemonade (LMND) Stock Be in 2030?Feb 24, 2026 •By Anthony Di Pizio1 No-Brainer Artificial Intelligence (AI) Stock to Buy With $60 and Hold for the Long TermAbout the AuthorLeo Sun is a contributing Motley Fool stock market analyst who has worked with the company since 2013, covering technology, consumer goods, industrial, and financial sectors. He became a self-made millionaire by age 40 through long-term investing, crediting lessons from Warren Buffett and Peter Lynch. Leo is a regular guest on CNBC Asia providing stock analysis on Chinese technology companies, including Tencent, Baidu, and Alibaba. He previously wrote for InvestorGuide and holds a bachelor’s degree in English from the University of Texas at Austin.TMFSunLionX@TMFSunLionStocks MentionedLemonadeNYSE: LMND$55.16(+0.22%)+$0.12*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.