New York, July 6, 2026, 14:07 EDT
- Lemonade NYSE:LMND jumped 8.4% to $77.50 in early afternoon trading, outpacing both the main U.S. market and insurance sector indexes.
- The shares were roughly 25% higher than analysts’ $62 average target.
- Lemonade’s two-point reduction in reinsurance cession looks minor, but it exposes roughly $26.6 million more in annualized premiums based on the Q1 in-force premium base.
Lemonade, Inc. NYSE:LMND climbed 8.4% to $77.50 by early afternoon in New York. The exchange was open, having marked Independence Day on Friday, July 3. Regular core hours are 9:30 a.m. to 4 p.m. ET, according to the New York Stock Exchange.
The move outpaced the broader market. SPDR S&P 500 ETF Trust NYSEARCA:SPY, Financial Select Sector SPDR Fund (NYSEARCA:XLF) and iShares Russell 2000 ETF NYSEARCA:IWM each gained under 1%. SPDR S&P Insurance ETF (NYSEARCA:KIE) slipped 0.5%.
| Name | Google Finance ticker | Early-afternoon price | Move |
|---|---|---|---|
| Lemonade, Inc. | NYSE:LMND | $77.50 | up 8.4% |
| SPDR S&P 500 ETF Trust | NYSEARCA:SPY | $750.48 | added 0.8% |
| Financial Select Sector SPDR Fund | NYSEARCA:XLF | $56.02 | up 0.7% |
| SPDR S&P Insurance ETF | NYSEARCA:KIE | $63.76 | down 0.5% |
| iShares Russell 2000 ETF | NYSEARCA:IWM | $299.71 | rose 0.7% |
Lemonade shares have climbed past where Wall Street was targeting even before showing a full quarter under its new reinsurance setup. Right now, MarketWatch shows a Hold is the average call, with the average price target at $62. The highest target stands at $92, and the lowest is $37.
| Forecast item | Figure | Implied at $77.50 |
|---|---|---|
| 12-month average target | $62.00 | 24.9% under latest price |
| Highest target | $92.00 | 18.7% above latest price |
| Lowest target | $37.00 | 52.3% under latest price |
| EPS forecast 2026 | -$1.74 | Expected loss |
| EPS forecast 2027 | -$0.81 | See smaller expected loss |
| EPS forecast 2028 | $0.51 | Turns to profit |
Reinsurance is the key here. Lemonade said last week it will renew its 12-month program starting July 1, cutting the quota-share cession to about 18% of premiums from roughly 20%. The new terms also add protection for catastrophe and higher-volatility risks. “This renewal improves Lemonade’s reinsurance economics, coverage, and capital efficiency at the same time,” CFO Tim Bixby said. Lemonade
Lemonade’s Q1 in-force premium stood at $1.33 billion. Two points of cession amounts to roughly $26.6 million in annualized premium. This is not a profit projection. There’s still losses, commissions, taxes, product mix, and catastrophe cover in play. But if underwriting stays steady, this runs straight through gross profit.
Lemonade shares are trading as if the turnaround is already baked in, even though earnings haven’t locked it down yet. For Q1, revenue jumped 71% to $258 million and gross profit climbed 159% to $100 million. Adjusted free cash flow came in at $17 million. The company is sticking to its outlook for positive adjusted EBITDA in Q4.
Chief Executive Daniel Schreiber linked the stronger revenue growth to higher retention on the April earnings call. “In the first quarter, in-force premium reached $1.33 billion, growing 32% year-over-year,” Schreiber said. “Revenue grew even faster, up 71%,” boosted by the reinsurance shift and better premium retention. Investing.com
Lemonade’s lower cession rate means it keeps more premium upside, but also takes on bigger swings if loss ratios get worse. The company said the new reinsurance program adds some catastrophe and tail risk protection.
Short sellers have a big presence in Monday’s session. MarketBeat data shows 10.78 million shares sold short as of June 15, making up 16.45% of the float and sitting at 6.6 days to cover.
Lemonade shares have jumped 32.1% in the past five days but are still under the 52-week high of $99.90, according to MarketWatch data. The company has its Q2 2026 earnings set for Aug. 5.
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