TLDR
- Lemonade stock hit a 52-week high of $89.69 and continued climbing to $98.91, up 169.44% over the past year
- Traders bought 31,222 call options on Thursday, representing a 69% increase above typical volume
- Company insiders sold 170,725 shares worth $13.06 million in the last 90 days despite strong stock performance
- Analysts maintain a “Hold” rating with an average price target of $71.50, well below current trading levels
- Lemonade beat Q3 revenue and earnings estimates but remains unprofitable with a forecasted -$3.03 EPS for the fiscal year
Lemonade stock closed at $98.91 on Thursday, marking a sharp 15.9% gain on heavy trading volume. The insurance technology company saw 3.96 million shares change hands, nearly double its average daily volume of 2.08 million.
The price surge came as traders snapped up call options at an unusual rate. They purchased 31,222 call contracts, about 69% higher than the typical volume of 18,479 contracts.
This options activity suggests traders are betting on continued upward momentum. The stock has already delivered a 169.44% gain over the past 12 months and a 107.03% return in just six months.
Lemonade now trades at its highest level in a year, surpassing the previous 52-week high of $89.69 set earlier. The company’s market capitalization has reached $7.39 billion, up from $6.38 billion.
Insider Selling Raises Questions
While retail traders pile in, company insiders have been heading for the exits. Over the last 90 days, insiders sold 170,725 shares worth approximately $13.06 million.
John Sheldon Peters, an insider, offloaded 18,930 shares at an average price of $72.77 in November. This sale reduced his stake by 18.49%.
COO Adina Eckstein sold 41,557 shares in December at $78.95 per share, totaling $3.28 million. Her transaction cut her ownership by 16.91%.
Insiders currently own 14.70% of the company. Institutional investors hold 80.30% of shares, with Vanguard Group owning 6.28 million shares valued at $336 million.
Mixed Analyst Outlook
Wall Street remains divided on Lemonade’s valuation. The consensus rating sits at “Hold” with an average price target of $71.50, roughly 28% below current levels.
Four analysts rate the stock a buy. Two recommend holding, while three have sell ratings.
Truist Financial initiated coverage with a “buy” rating and a $98 price target on January 6th. Citizens JMP raised its target from $60 to $80 in November, citing strong third-quarter results.
Citigroup maintained its “outperform” rating in mid-January. Piper Sandler took a more cautious stance, dropping its price target from $60 to $55 in October with a “neutral” rating.
The company beat expectations in its most recent earnings report. Lemonade posted revenue of $194.50 million versus estimates of $185.06 million, representing 42.4% year-over-year growth.
Earnings per share came in at -$0.51, better than the -$0.72 consensus estimate. Despite the beat, the company maintains a negative net margin of 26.39% and a negative return on equity of 31.86%.
Analysts forecast an EPS of -$3.03 for the current fiscal year. The stock trades at a price-to-earnings ratio of -41.38 with a beta of 1.98, indicating higher volatility than the broader market.
Lemonade recently launched specialized insurance for Tesla vehicles equipped with Full Self-Driving technology, cutting per-mile rates by 50% when autonomous features are engaged.
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