LMND. This Insurance Disruptor will DOUBLE in the Next 3 Months!NYSE:LMND is the new and promising tech company in the insurance market. It's beyond promising; it's already a product with proven scalability and disruptive features to the aging insurance business model. Lemonade follows a creative insurance model. To understand this, consider the conventional insurance business model where companies are incentivized to NOT approve claims of their customers. That's because less money given to customers means more profits for the shareholders. This places you, the customer, and them in a constant state of dispute. It is a flawed business model. Lemonade flips that around and removes the incentive completely by introducing one simple rule. Their profit margin is fixed. They will always take 25% of what you pay. The remaining 75% will be used either to cover claims, or to be donated to a charity organization of your choice. This way, they have no incentive to deny your claim. At the same time, you have no incentive to claim more than what you think is fair because you will be reducing what goes to the charity of your choice.
On top of that, Lemonade is a tech company that employs Artificial Intelligence to manage claims. You will be surprised, and perhaps you shouldn't be, how well an AI can catch a fraudster trying to falsely claim some insurance money. This already cuts the cost by a huge margin and allows for faster growth and better scalability.
Currently, Lemonade has proven that their platform works and that it can expand. They are slowly covering more areas than just pet insurance and household insurance. They are expanding to more states in the US and countries around the world. And all of that at a minimal cost of human resource. And the brilliant thing is that the more they expand, the more data they will have to train their AI, and the more accurate and efficient the process would be. That is what disruption looks like. It's new. It flips the model around. It works. It cuts cost by a big margin. It scales. It grows before you even know it. Think Apple, Amazon, Tesla.
Now after this brief introduction, let's get into the chart. I've drawn this ascending channel a week ago and I am surprised that it is holding price this well. This shows strong demand added to the higher lows in RSI. I believe this momentum will accelerate in the coming few months. I've drawn targets based on Fibonacci of the most recent swing.
According to the channel and the Fib levels, this stock can reach $222 by 22 Feb. That's 80% gain in 48 days. I believe that in 90 days, this stock will have doubled, and by the end of the year it will have 5X'd. This is a stock to buy and hold, not a stock to trade. Good luck!
