TLDR
- LMND stock dropped 10–12% in the days after its Q4 2025 earnings release
- Q4 revenue hit $228.1 million, up 53% year-over-year, but losses continue
- 2026 guidance projects an adjusted EBITDA loss of $48–$52 million
- Piper Sandler cut its price target from $85 to $65, keeping a Neutral rating
- Full-year EBITDA profitability is now targeted for 2027
Lemonade stock fell between 10% and 12% in the days following its Q4 2025 earnings report, released February 19, 2026.
Lemonade, Inc., LMND
The drop came despite the company posting its strongest quarter on record.
Q4 revenue reached $228.1 million, a 53% jump year-over-year. The net loss came in at $0.29 per share, and the adjusted EBITDA loss narrowed to around $5 million for the quarter.
Lemonade Inc. (#LMND) $LMND, Q4-25.
Results:
— EarningsTime (@Earnings_Time) February 19, 2026
In-force premium climbed to approximately $1.24 billion, another company record.
Full-year 2025 revenue totalled $737.9 million. The full-year net loss was $165.5 million, an improvement on the prior year.
2026 Guidance Takes the Shine Off
For 2026, Lemonade guided to revenue of $1.187–$1.192 billion. On paper, that’s strong growth.
The problem is what sits alongside it. The company projected a full-year adjusted EBITDA loss of $48–$52 million, with Q1 2026 alone expected to carry a loss of $22–$25 million.
Lemonade does expect a positive adjusted EBITDA quarter in Q4 2026, with full-year EBITDA profitability targeted for 2027. That timeline hasn’t moved, and that’s the sticking point for investors.
The gap between revenue growth and profit delivery is what triggered the reset in sentiment.
Analysts Turn Cautious
Piper Sandler cut its price target from $85 to $65 after the print, holding a Neutral rating. The new target implies around 13.4% upside from the most recent close of $57.31.
The firm pointed to Lemonade’s pattern of missing its own EBITDA targets as the core concern, even as underwriting improves.
Piper acknowledged the concerns may be “overly simplistic,” noting the company is performing well in direct-to-consumer personal lines. But the market wasn’t in a forgiving mood.
Across Wall Street, the average price target sits at $65.11, implying about 14% upside. Of 11 analysts tracked, three rate LMND a Buy or higher, five Hold, and three Sell.
AI Progress and New Products
There were genuine positives in the report. Lemonade launched an AI-enabled autonomous car insurance product during the quarter.
Its AI operating system, Blender, now allows claims adjusters to handle three times their previous volume. Management said AI is now reflected across “pretty much every line” of the P&L.
Marketing spend has more than tripled, driven by AI-powered improvements in segmentation and pricing.
Long-term projections put revenue at $1.8 billion and earnings at $201.4 million by 2028. More bullish estimates had targeted revenue as high as $2.0 billion by that year.
Piper Sandler’s $65 price target remains the most recent analyst marker on the stock.
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