Lemonade (LMND) Soars 6.99% on Earnings Beat

Lemonade (LMND) shares surged 6.99% today, marking the second consecutive day of gains, with a total increase of 10.99% over the past two days. The stock price reached its highest level since March 2025, with an intraday gain of 9.25%.

Over the past five years, the strategy of buying LMND shares after they reached a recent high and holding for one week delivered strong returns. The strategy achieved an impressive 231.82% return, vastly outperforming the benchmark, which gained 49.45%. The excess return generated by the strategy was 182.37%, indicating that it effectively captured significant upward momentum in LMND's stock price. However, the strategy's Sharpe ratio of 0.89 and a maximum drawdown of -50.88% reveal that while it delivered high returns, it also came with considerable volatility and risk.

Lemonade's first-quarter earnings for 2025 exceeded market expectations, reporting a 27% year-over-year increase in revenue. This marks the sixth consecutive quarter of accelerating top-line growth, which has been a significant driver for the company's stock price.

In addition to strong earnings, significant bullish options activity was detected in Lemonade. Call volumes were six times the expected amount, and implied volatility increased by almost 9 points. This heightened options activity suggests that investors are optimistic about the company's future prospects, further contributing to the recent stock price movements.