Sell in May and Go Away? Absolutely Not -- 1 Artificial Intelligence (AI) Stock to Buy Hand Over Fist Instead.

Core Viewpoint - The article discusses the investment potential of Lemonade, a company leveraging artificial intelligence in the insurance industry, highlighting its strong financial performance and growth prospects despite recent challenges [4][10][12]. Company Overview - Lemonade is transforming the insurance industry by utilizing AI to enhance customer experience, with chatbots that expedite quotes and claims processing [5]. - The company offers various insurance products, including renters, homeowners, life, pet, and car insurance, and has seen significant customer growth, reaching 2.5 million customers by Q1 2025, a 21% increase year-over-year [6]. Financial Performance - Lemonade's in-force premium (IFP) surpassed $1 billion for the first time in Q1 2025, with a year-over-year growth rate of 27% [8]. - The company's Q1 revenue reached a record $151.2 million, up 27% from the previous year, exceeding management's forecast [10]. - The trailing 12-month gross loss ratio improved to 73%, indicating effective management of claims relative to premiums [9]. Growth Prospects - Management projects that Lemonade could achieve $10 billion in IFP over the next decade, showcasing the company's rapid scaling potential [13]. - The stock is currently valued attractively, trading 81% below its all-time high, with a price-to-sales (P/S) ratio of 4.1, the lowest since going public [14]. Challenges and Considerations - Despite the positive outlook, Lemonade's adjusted EBITDA losses increased by 38% to $47 million in Q1, primarily due to significant wildfire-related claims [11]. - The company is expanding into new markets, which may temporarily increase its gross loss ratio as it scales operations [16]. - Investors are encouraged to adopt a long-term perspective, as the path to achieving $10 billion in IFP may involve volatility [17].