Lemonade Inc (NYSE:LMND) has become a significant option for investors using a mixed technical and fundamental growth plan. The stock was found by a screening method that uses Mark Minervini's Trend Template to confirm strong technical condition, while also needing a high Growth Momentum rating to find companies with improving business fundamentals. This two-part method aims to find securities that are both in solid price uptrends and have backing from corporate growth, a plan made to identify leaders early in their main price increases.
Meeting the Minervini Trend Template
The center of Mark Minervini's plan is his Trend Template, a group of technical rules made to filter for stocks in a verified and solid stage 2 uptrend. Lemonade shows a clear match with these rules, indicating strong institutional interest and a continuing positive trend.
- Price Above Key Moving Averages: The stock's present price of $58.66 trades well above its increasing 50-day ($53.82), 150-day ($43.35), and 200-day ($41.12) simple moving averages. This layered order shows positive momentum across short, intermediate, and long-term periods.
- Upward-Sloping Moving Averages: All main moving averages are moving higher. Importantly, the 150-day SMA is above the 200-day SMA, and the 50-day SMA is above both, confirming the force and order of the uptrend.
- Proximity to Highs: A main idea of the plan is to concentrate on strength, not weakness. LMND is presently trading within 8% of its 52-week high of $63.48, showing it is a market leader. Also, its price is over 140% above its 52-week low, confirming a solid recovery and growth pattern.
- Superior Relative Strength: With a ChartMill Relative Strength rating of 94.64, LMND is doing better than almost 95% of all stocks in the market. Minervini points out that the largest winners almost always display high relative strength early in their advances, as it shows the stock is a leader in its field.
This technical arrangement indicates that LMND is being accumulated and fits the strict standards for a stock in a controlling uptrend, a main filter for staying away from weak or correcting issues.
Qualifying as a High-Growth Candidate
Beyond a solid chart, the Minervini plan highlights the value of solid fundamental growth to support continued price gains. Lemonade shows several main measures that meet the needs for a high-growth momentum investment.
- Strong Revenue Expansion: The company is showing major top-line growth, with a 34.5% rise in sales in the last quarter compared to the same time last year. This speeding up in income is a classic sign of companies before they make their most important price moves.
- Notable Earnings Momentum: Maybe the most interesting fundamental part is the pattern in earnings per share (EPS). The EPS growth for the last quarter jumped by 25.9% year-over-year. More significantly, the company has exceeded analyst EPS estimates in all of the last four quarters, with an average surprise of over 19%. This steady overachievement often works as a trigger, drawing institutional interest.
- Positive Analyst Revisions: The average estimate for next year's EPS has been changed upward by 6.67% over the last three months. Such upward changes are a solid sign of increasing analyst belief in the company's future profit, a factor Minervini carefully observes.
- Sector Leadership: The technical report confirms that LMND is doing better than 100% of the other 146 stocks in the Insurance industry. Leading a solid field is a common feature among the best-performing stocks.
These fundamental traits fit with the plan's focus on finding companies with "big earnings" that are likely to get "big attention," creating the chance for large price growth.
Technical Condition and Setup Evaluation
According to ChartMill's complete technical report, LMND is in outstanding technical condition, getting a top rating of 10 out of 10. The analysis states that both the long-term and short-term trends are good, and the stock's solid performance over the past year has been steady. The report also finds main support levels, including an important area near $46.65 from a daily trend line, which can work as a reasonable place for risk control.
However, the report gives a critical point for possible entrants: while the technical rating is outstanding, the present Setup Quality score is low. This shows that after a major advance, the stock's price movement has become unstable and it is not presently creating a tight, low-risk consolidation shape like a Volatility Contraction Pattern (VCP). For traders following exactly the Minervini playbook, this indicates waiting could be needed, looking for a more clear base to develop before starting a new position.
A complete summary of the technical structure, including support and resistance levels, can be seen in the detailed ChartMill Technical Report for LMND.
Conclusion
Lemonade Inc offers an interesting case for investors tracking a growth-and-momentum-based plan. The stock meets the strict technical rules of the Minervini Trend Template, confirming it is in a solid stage 2 uptrend with better relative strength. Fundamentally, it shows the high-growth qualifications—including speeding up income, solid earnings beats, and positive analyst changes—that are often the base of continued price gains. While the present technical setup indicates looking for a more ideal entry point, LMND's basic technical and fundamental profile makes it a stock worth careful watching.
For investors looking for more chances that fit this specific high-growth and technical momentum profile, additional study can be done using the preset screen. You can find more qualifying stocks through this screening link.
Disclaimer: This is not financial advice. Our content is intended to be used and must be used for information and education purposes only. It is essential to perform your own research and consult with a qualified financial advisor before making any investment decisions.
