Opinions
Jim Cramer - Mad Money
Lemonade
LMND-N
COMMENT
Feb 26, 2021
An AI-powered insurance broker. 11% of shares were just shorted. They report Monday.
$125.790
Stock price when the opinion was issued
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PARTIAL SELL
Lemonade is an A.I. insurer and disruptor. He likes it. Lemonade shot up before Christmas, but plunged 14% Dec. 28 right before its next lock-up expired the following day. The company had traded only 11 million of a total 57 million as listed in their IPO. They unlocked 15 million in November, then 30 million more in late December. Heavy volatility followed to present. Then an investing article spurred a huge short squeeze. It now trades at absurd levels. Take profits here and don't tempt fate.
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DON'T BUY
2020 IPOs cost too much, and are worth buying now that they are out of style and cheaper. This insurance disruptor was worth buying below $50, which happened two months after its IPO. Then, it took off, but down 50% from its peak now. He loves this company, but they're losing tons of money and the stock trades at 50x sales (not earnings).
Financial Services
HOLD
Artificial intelligence insurance company.
Company shares have been hit very hard with tech selloff.
Hoping to replace human element in insurance business.
Burning through a lot of cash the next 2-4 years.
Wants to see more cash flow before investing.
Rising interest rates will negatively impact this business.
Better options for investors.
Financial Services
DON'T BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
LMND has done well, up 58% in the past year. But it is fairly small, losing money, pays no dividend and is risky/volatile. We do not have anything against it really but it is not a conservative stock and it depends on an investors' profile. We would not see it as a need-to-own name.
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