Lemonade (LMND) Stock Slips Into the Weekend After Sharp Pullback; What Analysts, Short Interest, and Next Catalysts Signal

NEW YORK, Dec. 28, 2025, 5:18 a.m. ET — Market closed

Lemonade, Inc. (NYSE: LMND) heads into the weekend with investors recalibrating after a steep Friday decline capped a volatile stretch for the high-beta insurtech name. Shares last closed at $74.69, down 6.4% on the day after trading between $73.95 and $80.42.

With U.S. equity markets shut for the weekend, attention shifts to whether the move was mostly year-end profit-taking after a powerful 2025 run—or a sign that expectations have gotten too hot for comfort ahead of the next major catalyst: earnings season.

What happened to LMND on Friday—and why it matters

The late-week drop put a spotlight back on Lemonade’s defining trait in 2025: big swings. The stock is coming off an extended rally that pushed it near the top of its 52-week range ($24.31 to $85.20), before momentum cooled. ^[1]

Weekend market coverage framed the slide as a reality check following intense bullish sentiment and speculative positioning. A TipRanks weekend recap pointed to a pullback after an outsized run that had been fueled by upbeat analyst commentary and heavy call activity, noting that some of that “froth” appeared to unwind as sentiment cooled. ^[2]

A separate Seeking Alpha weekly “financials wrap” also flagged Lemonade among the laggards for the holiday-shortened trading week ended Dec. 26. ^[3]

Meanwhile, the broader financial media drumbeat hasn’t turned uniformly negative. A Motley Fool feature syndicated on Nasdaq early Sunday still grouped Lemonade among “growth stocks to buy for 2026,” emphasizing the company’s technology-driven model and longer-term opportunity—while also implicitly underscoring how narrative-driven the stock can be. ^[4]

The analyst debate: bullish targets vs. valuation gravity

If Lemonade stock feels like it’s being pulled by competing forces, that’s because it is. Recent analyst moves reflect a market argument that has become central to the LMND story:

The bull case: improving underwriting and scaling—especially in auto—can drive the business toward profitability.
The bear case: the stock’s rebound has outrun near-term fundamentals, and additional growth spending may still be required.

Morgan Stanley: upgrade with an $85 target

Morgan Stanley recently upgraded Lemonade to Equalweight and set an $85 price target, citing an improved outlook around execution and longer-term profitability, including a pathway toward positive EBITDA by late 2026, according to an Investing.com summary of the note. ^[5]

Citizens JMP: Outperform and an $80 target (with a named analyst)

In a note carried by TheFly and republished by TipRanks, Citizens JMP analyst Matthew Carletti raised the firm’s price target to $80 from $60 and reiterated an Outperform rating, describing Lemonade as early in its lifecycle and positioned to gain share as it builds out its model. ^[6]

KBW: target raised, but Underperform maintained

Keefe, Bruyette & Woods (KBW) also raised its target—to $40 from $35—while keeping an Underperform rating. KBW cited more favorable intermediate-term loss ratio trends behind the increase, but warned about potential pressure from growth-related expenses, including sales and marketing spend, in an increasingly competitive environment. ^[7]

The “consensus” view: Hold, with targets below Friday’s close

On MarketBeat, Lemonade carries a consensus “Hold” rating with an average price target around $63, which sits below the latest closing level—an example of how split the Street remains even after the 2025 run. ^[8]

The gap between targets (roughly the $40s on the bearish end to the $80s on the bullish end) is a useful tell: LMND is still being valued more like a “trajectory” than a steady-state business—which can amplify moves in either direction.

Short interest stays elevated—fuel for volatility in both directions

One reason Lemonade can move fast is positioning. As of Dec. 15, MarketBeat reported short interest of about 13.16 million shares, representing roughly 20% of the public float, with a “days to cover” ratio of about 5.3. ^[9]

High short interest doesn’t guarantee a squeeze. But it does raise the odds of sharp rallies if bullish catalysts arrive (or if shorts rush to cover), and it can worsen selloffs when momentum breaks.

For another lens on positioning, Fintel data showed relatively low short borrow fee rates in late December—suggesting borrow availability wasn’t extremely tight at that moment. ^[10]

Options activity: why LMND can “gap” more than peers

Lemonade has been a frequent topic in options-driven trading circles in 2025, and that matters because options flows can create feedback loops—especially in smaller, higher-beta names.

TipRanks’ weekend recap pointed to unusually bullish options activity earlier in the run, including call volume above typical levels and a low put/call setup, followed by a cooling-off that may have contributed to the week’s pullback. ^[11]

This is one reason LMND can feel “twitchy”: when options flows shift, the stock can reprice quickly—even without fresh company news.

Insider activity investors are watching

Insider transactions don’t automatically signal trouble—sales can happen for many reasons (taxes, diversification, planned selling). Still, in a momentum stock, insider selling often gets attention.

Two recent SEC Form 4 filings show sales by company insiders/directors earlier in December:

Debra Schwartz (Director) reported selling 4,200 shares at a weighted average price of $83.59 (transaction date 12/11/2025). ^[12]
John Sheldon Peters (Chief Insurance Officer) reported selling 3,554 shares at $81.00 (transaction date 12/10/2025). ^[13]

Separately, a Refinitiv note published via TradingView said Lemonade’s COO filed a Form 144 proposing the sale of a small block of restricted shares earlier in December, executed pursuant to a prearranged trading plan (10b5-1), according to the report. ^[14]

The technical setup heading into Monday’s session

From a trend perspective, LMND is still above major moving averages even after Friday’s drop. MarketBeat data pegged Lemonade’s 50-day moving average around $70.72 and its 200-day moving average around $55.96. ^[15]

That leaves a clear “map” many traders will watch when markets reopen:

Near-term support zone: the low-to-mid $70s (where Friday found its intraday low).
Trend support: the 50-day moving average area (~$70–$71). ^[16]
Overhead supply/resistance: the upper-$70s to low-$80s, and the recent highs near the top of the 52-week range. ^[17]

What investors should know before the next session

Because the exchange is closed today, the key is preparation: understand what can realistically move the stock between now and Monday’s open—and what’s just noise.

1) Don’t expect new “company news” to be the only driver

In the last 24–48 hours, much of the Lemonade chatter has been market commentary (weekly recaps and weekend analysis) rather than fresh corporate announcements. ^[18]
That means Monday’s action may be driven as much by positioning, liquidity, and broader market tone as by anything Lemonade-specific.

2) Watch the macro calendar: it’s a holiday-shortened week

Investopedia flagged a New Year’s holiday week setup with key data points including pending home sales (Monday), Case-Shiller home prices (Tuesday), jobless claims (Wednesday), and Fed minutes (Tuesday)—events that can shift risk appetite for high-volatility growth stocks. ^[19]
U.S. markets are also closed for New Year’s Day (Thursday, Jan. 1, 2026), which can concentrate liquidity and amplify moves into fewer sessions. ^[20]

3) Know the next big LMND catalyst: earnings (date not confirmed)

MarketBeat lists Lemonade’s next earnings date as estimated Feb. 24, 2026, while noting the company has not confirmed the date. ^[21]
With a stock this sensitive to expectations, even small shifts in outlook—growth spend, loss ratios, reinsurance costs, or auto insurance scaling—can reset the narrative quickly.

The bottom line

Lemonade stock enters the weekend at a crossroads: it’s still up dramatically over longer horizons and remains one of the market’s most debated “AI-meets-insurance” stories—but the latest pullback shows how quickly sentiment can reverse when valuation, positioning, and profit-taking collide. ^[22]

When markets reopen Monday, investors will be watching whether Friday’s drop is treated as a buy-the-dip moment within a longer uptrend—or the start of a deeper reset toward more cautious analyst targets. ^[23]