Should You Consider Adding Lemonade (LMND) to Your Portfolio?

Maple Tree Capital, an investment management company, released its Q3 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was mixed for Maple Tree Capital. The market continued to rebound from the Liberation Day lows, while the firm’s performance was affected by the late-quarter decline of one of its largest holdings, Upstart. This resulted in the Jonagold portfolio concluding the quarter with a 13.12% loss. On the other hand, its Heartwood portfolio delivered an exceptional quarter, gaining 40.2%, driven by the strong performance of its new holdings. Heartwood's return has exceeded 100% since its inception in 2023, greatly surpassing the S&P 500's 82% return during the same period. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Maple Tree Capital highlighted stocks such as Lemonade, Inc. (NYSE:LMND). Lemonade, Inc. (NYSE:LMND) is an insurance company that offers various insurance products. The one-month return of Lemonade, Inc. (NYSE:LMND) was -1.16%, and its shares gained 94.44% of their value over the last 52 weeks. On December 29, 2025, Lemonade, Inc. (NYSE:LMND) stock closed at $71.32 per share, with a market capitalization of $5.33 billion.

Maple Tree Capital stated the following regarding Lemonade, Inc. (NYSE:LMND) in its third quarter 2025 investor letter:

"Lemonade, Inc. (NYSE:LMND) continues to impress and remains a very high-conviction name in the Jonagold portfolio. With Agentic AI now running a majority of their back-end operations, we see immense potential for operating leverage as they scale their trusted, Gen-Z friendly brand. We will look to add to our position as we accumulate additional capital."

Lemonade, Inc. (NYSE:LMND)  is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 32 hedge fund portfolios held Lemonade, Inc. (NYSE:LMND) at the end of the third quarter, up from 30 in the previous quarter. Lemonade, Inc.'s (NYSE:LMND) Q3 2025 revenue grew 42% year-over-year to $195 million. While we acknowledge the potential of Lemonade, Inc. (NYSE:LMND) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Lemonade, Inc. (NYSE:LMND) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.