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News  ›  The Motley Fool

How Lemonade Stock Gained 120% in 2025

The Motley Fool Logo The Motley Fool By Anders Bylund
How Lemonade Stock Gained 120% in 2025

Lemonade stock surged 120% in 2025 as its AI-powered insurance model demonstrated significant improvements. The company's gross loss ratio improved from 88% to 67% over two years, allowing it to retain 33% of premiums after claims versus 12% previously. Strong earnings beats and advancing AI systems have attracted Wall Street attention, though the company remains unprofitable and depends on reinsurers for risk management.

Insights
LMND   positive

Stock gained 120% in 2025 with improving financial metrics (loss ratio down from 88% to 67%), consistent earnings beats of 25-31%, advancing AI capabilities, and expanding gross margins. Company is positioned as a disruptor in a trillion-dollar market, though still unprofitable.