Highly Shorted Stock Lemonade Jumps On Strong Quarter
Lemonade, Inc. (NYSE:LMND) shares are trading higher premarket on Thursday after the company reported upbeat fourth quarter fiscal 2025 results.
The stock surged over 12%, with already high short interest — exceeding 21% of the tradable float — likely amplifying buying pressure.
The company reported a loss of 29 cents per share, outperforming the analyst consensus estimate of a 41-cent loss.
Sales of $228.1 million beat the analyst consensus estimate of $215.8 million.
Sales rose 53% year over year (Y/Y), led by higher gross earned premium, ceding commission income, and a reduced premium cession rate related to quota share reinsurance.
Adjusted gross profit increased 69% Y/Y to $112.0 million on higher revenue and an improvement in the net loss ratio.
The company reported adjusted EBITDA loss of ($4.6) million, which narrowed from the loss of ($23.8) million in the prior year quarter on higher revenues and improved underwriting results.
As of December 31, 2025, cash, cash equivalents, and investments stood at around $1.12 billion.
In force premium (IFP) rose 31% Y/Y to $1.237 billion, with premium per customer rising 7% Y/Y to $414 million in the quarter on growth across all businesses except Homeowners multi-peril.
Gross earned premium increased 28% Y/Y to $290.2 million in the fourth quarter.
Outlook
For the first quarter, the company expects in-force premium of $1.321 billion to $1.326 billion and sales of $246 million to $251 million, compared with the Street estimate of $241.822 million.
For fiscal 2026, Lemonade expects sales of $1.187 billion to $1.192 billion, versus the analyst estimate of $1.158 billion, and in-force premium of $1.625 billion to $1.630 billion.
Elevated Short Interest
The company has a short float of 11.964 million shares, representing 21.10% of its 56.71 million publicly traded float, indicating a relatively high level of short interest among investors betting against the stock.
LMND Price Action: Lemonade shares were up 12.99% at $74.27 during premarket trading on Thursday.
Photo via Shutterstock
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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