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ZYBERNO

Stock Report

Updated Aug 30, 2026

Lemonade, Inc. (LMND)

Financial Services • NYSE

$52.96

Lemonade Inc. is an American digital insurance company headquartered in New York City that uses AI to provide renters, homeowners, car, pet health, and term life insurance. The company's mobile-first platform uses AI bot 'Maya' for instant policy binding and AI bot 'Jim' for rapid claims processing, targeting younger, digitally-native consumers with transparent pricing and a charitable giveback (Lemonade Giveback) for unclaimed premium.

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

26.0/100

POOR BUSINESS

Lemonade, Inc. (LMND) scores 26/100 — concerning metrics indicating significant structural or financial risks.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full LMND quality analysis & detailed breakdown

VALUATION SIGNAL

⚠

Business Model Limitation

Lemonade, Inc. operates in the Insurance industry. Owner Earnings-based DCF analysis — the foundation of both the Margin of Safety and the Brina Gap — is not well-suited to companies whose business model is structurally built around leverage: banks, insurers, mortgage companies, and REITs. These businesses are typically valued using sector-specific metrics such as Price-to-Book, Price-to-FFO, or Net Asset Value. Treat these signals as directional only.

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

-100.0%

Overvalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

🎯 Expected Annual Return →

-62.5%

Margin of Safety convergence — your return if the market re-prices to intrinsic value (5-yr annualised)

-3.2%

Yield + growth — what the business alone earns you, even if the market never re-rates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full LMND valuation analysis · → View full LMND Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-26.8%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.08x)

Operating Margin (Operational Efficiency):CRITICAL (-13.7%)

Return on Capital (Capital Efficiency):CRITICAL (-63.8%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

Lemonade, Inc. (LMND) stock report — Zyberno Score 26/100 (POOR BUSINESS), Margin of Safety -100.0%, -63% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, Lemonade, Inc. (LMND) trades at $52.96 against an estimated intrinsic value per share of $1.21 — a -100.0% Margin of Safety based on Owner Earnings of $20.80M TTM, projected at -35.4% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of -62.5% annually.

Over the trailing twelve months, LMND generated $20.80M in Owner Earnings. Capital was deployed as follows: $10.60M invested in capital expenditures. Reinvestment rate: 5.8%. Owner Earnings have declined at 35.4% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:52.96

Market Cap:$4.08B

Valuation Multiples (3)

P/B Ratio:8.16x

P/S Ratio:4.18x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$3.73B

Pfcf Ratio:209.08x

Price Action & Momentum (3)

12-1 Momentum:

+59.6% (81th pctile)

📈 Click to view full LMND Momentum analysis →

Momentum Percentile:81 / 100

% of 52-Week High:53.0%

B. Profitability Assessment

Return Metrics (5)

ROE:

-26.8%

📊 Click to view full LMND ROE analysis →

ROA:-7.1%

Roic:

-63.8%

📊 Click to view full LMND ROIC analysis →

Reinvestment Rate:5.8%

Fundamental Growth Rate (g):-3.7%

Margin Analysis (3)

Operating Margin Ttm:-13.7%

Net Margin Ttm:-14.2%

Ebitda Margin:-12.3%

TTM Performance (2)

Operating Margin Ttm:-13.7%

Net Margin Ttm:-14.2%

Yield Metrics (3)

Earnings Yield:-$3.42

Owner Earnings Yield:$0.51

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

-0.52

📊 Click to view full LMND Earnings Surprise analysis →

EPS Surprise vs Expected:-26.0%

Latest Earnings Filed:2026-08-04

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):37.8%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):-36.2%

Operating Cash Flow Growth Rate (Linear):-27.5%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:0.24x

Quick Ratio:0.24x

Cash Ratio:0.24x

Leverage Analysis (3)

Debt To Equity Ttm:0.08x

Debt-to-Equity Ratio:0.08x

Debt To Ebitda:-999.00x

Coverage Ratios (1)

Times Interest Earned:-999.00

Capital Structure (4)

Working Capital:-1,144,800,000.00

Cash And Cash Equivalents:367,600,000.00

Long Term Debt:$20.00M

Net Debt:-$342.70M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $975.00M

Linear Growth: 37.8%

📊 Click to view full LMND Revenue analysis & methodology →

Cost Of Revenue Ttm:$0.00

Profitability Breakdown (2)

$0.00-$133.30M

Bottom Line Performance (3)

-$138.40M

Income Before Tax:-$133.30M

Ebitda Ttm:-119,900,000.00

Operating Expenses (5)

Operating Expenses:0.00

R And D Expense:106,400,000.00

Sga Expense:168,100,000.00

Income Tax Expense:$5.10M

Interest Expense:0.00

Expense Ratios (3)

R And D To Revenue Percentage:36.1%

Sga To Revenue Percentage:57.1%

Ebitda Margin:-12.3%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$2.01B

Current Assets:$367.60M

Ppe Net:18,900,000.00

Goodwill:19,000,000.00

Intangible Assets:$8.10M

Liability Structure (4)

Total Liabilities:1,512,400,000.00

Current Liabilities:1,512,400,000.00

Long Term Debt:$20.00M

Short Term Debt:$4.90M

Equity & Capital (3)

Equity:$499.50M

Retained Earnings:-$1.54B

Common Stock:200,000,000.00

Working Capital Items (3)

Accounts Receivable:0.00

Inventory:0.00

Accounts Payable:0.00

Special Items (2)

Contract Liabilities:0.00

Stock Based Compensation:24,500,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $30.10M

Linear Growth: -27.5%

Free cash flow TTM: $19.50M

Linear Growth: -36.2%

📊 Click to view full LMND Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$34.60M

Capital Expenditures Ttm:10,600,000.00

Financing Activities (3)

Financing Cash Flow:$26.20M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:13,400,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-1.81

-$1.81

Earnings Per Share Ttm:-$1.80

Revenue & Cash Per Share (3)

Sales Per Share Ttm:12.66

Operating Cash Flow Per Share:-$0.21

Fcf Per Share Ttm:0.25

Book Value & Capital (2)

Book Value Per Share:$6.49

Cash Per Share:4.78

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.50x

Working Capital Turnover Ttm:-999.00x

Receivables Management (2)

Receivables Turnover Ttm:-999.00x

Days Sales Outstanding Ttm:-999.00

Inventory Management (2)

Inventory Turnover Ttm:-999.00x

Days Inventory Outstanding Ttm:-999.00

Payables & Cash Cycle (2)

Days Payable Outstanding:-999.00

Cash Conversion Cycle:-999.00

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:60.00

Quality Score:30.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $20.80M

Linear Growth: -35.4%

📊 Click to view full LMND Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.27

Owner Earnings Yield:$0.51

Growth Assessment (1)

Owner Earnings Growth Rate:-$35.42

Damodaran Growth Analysis (2)

Reinvestment Rate:5.8%

Fundamental Growth Rate (g):-3.7%

Intrinsic Value Models (1)

Intrinsic Value:

$92.77M

📊 Click to view full LMND DCF valuation →

Margin of Safety (1)

Margin Of Safety:

-100.0%

📊 Click to view full LMND valuation analysis →

Return Scenarios (2)

Theoretical 5-Year Return:

-62.5%

📊 Click to view full LMND expected return analysis →

Forward Expected Return (Yield + Growth):

-3.2%

📊 Click to view full LMND expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (1)

Revenue Growth Rate (Linear):37.8%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):-36.2%

Operating Cash Flow Growth Rate (Linear):-27.5%

Other Growth Rates (2)

Book Value Growth Rate (Linear):-14.4%

Owner Earnings Growth Rate:-$35.42

C. Company Profile & Context

Corporate Information (6)

Symbol:LMND

Company Name:Lemonade, Inc.

Sector:Financial Services

Industry:Insurance

Exchange:NYSE

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:high

Volume Category:N/A

Share Structure (3)

Shares Outstanding:76.98M

Shares Outstanding Basic:76.98M

Shares Outstanding Diluted:76.98M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-30 11:42:47 UTC

Data Timestamp:2026-08-30T11:42:47.975458