Root (NASDAQ:ROOT) Posts Earnings Results, Beats Expectations By $1.25 EPS
by Scott Moore · The Cerbat GemRoot (NASDAQ:ROOT – Get Free Report) released its quarterly earnings data on Wednesday. The company reported $2.09 EPS for the quarter, beating analysts’ consensus estimates of $0.84 by $1.25, FiscalAI reports. The business had revenue of $393.50 million during the quarter, compared to the consensus estimate of $398.16 million. Root had a return on equity of 15.34% and a net margin of 2.58%.The firm’s revenue was up 12.5% on a year-over-year basis. During the same quarter in the prior year, the company posted $1.07 earnings per share.
Here are the key takeaways from Root’s conference call:
- Root reported its most profitable quarter ever, generating an annualized ROE of 47% and record net income of $36 million (operating income $41M, adjusted EBITDA $57M).
- Distribution is diversifying and scaling — partnerships grew new writings 30% year-over-year, the company now partners with over 15,000 agents across 5,000 agencies, and Carvana embedded sales surpassed 200,000 policies.
- Management strengthened capital flexibility by refinancing a $200 million facility to lower interest expense by roughly $5 million annually and the board authorized a $75 million share repurchase program while continuing investment in technology and growth.
- Root said the direct channel became more competitive during the quarter, prompting disciplined pullbacks in direct marketing spend and warning that near-term PIF and premium growth may remain muted if those conditions persist.
Root Trading Up 0.3%
NASDAQ ROOT traded up $0.15 on Wednesday, reaching $55.05. The company had a trading volume of 412,022 shares, compared to its average volume of 290,138. Root has a 52 week low of $40.91 and a 52 week high of $162.99. The company has a quick ratio of 1.21, a current ratio of 1.21 and a debt-to-equity ratio of 0.70. The stock has a market cap of $856.58 million, a price-to-earnings ratio of 23.73 and a beta of 2.95. The stock’s 50 day moving average is $48.97 and its 200-day moving average is $64.94.
Hedge Funds Weigh In On Root
Several institutional investors have recently modified their holdings of the business. T. Rowe Price Investment Management Inc. lifted its holdings in shares of Root by 8.5% during the 4th quarter. T. Rowe Price Investment Management Inc. now owns 946,632 shares of the company’s stock valued at $68,376,000 after purchasing an additional 74,427 shares in the last quarter. Geode Capital Management LLC raised its holdings in Root by 4.1% during the 4th quarter. Geode Capital Management LLC now owns 310,967 shares of the company’s stock worth $22,466,000 after buying an additional 12,238 shares during the period. State Street Corp raised its holdings in Root by 5.0% during the 4th quarter. State Street Corp now owns 258,168 shares of the company’s stock worth $18,647,000 after buying an additional 12,321 shares during the period. UBS Group AG raised its holdings in Root by 372.1% during the 3rd quarter. UBS Group AG now owns 228,738 shares of the company’s stock worth $20,474,000 after buying an additional 180,289 shares during the period. Finally, Millennium Management LLC raised its holdings in Root by 780.1% during the 4th quarter. Millennium Management LLC now owns 220,815 shares of the company’s stock worth $15,949,000 after buying an additional 195,725 shares during the period. Institutional investors own 59.82% of the company’s stock.
Wall Street Analyst Weigh In
A number of research firms recently commented on ROOT. Keefe, Bruyette & Woods dropped their price objective on Root from $104.00 to $95.00 and set an “outperform” rating for the company in a report on Tuesday, April 7th. Weiss Ratings upgraded Root from a “sell (d+)” rating to a “hold (c)” rating in a report on Thursday, February 26th. UBS Group dropped their price objective on Root from $90.00 to $52.00 and set a “neutral” rating for the company in a report on Monday, March 9th. Wall Street Zen upgraded Root from a “sell” rating to a “hold” rating in a report on Saturday, February 28th. Finally, Zacks Research upgraded Root from a “strong sell” rating to a “hold” rating in a report on Monday, January 12th. Two research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. According to data from MarketBeat.com, Root presently has an average rating of “Hold” and a consensus price target of $92.40.
View Our Latest Report on Root
About Root
Root, trading on the Nasdaq under the ticker ROOT, is a Columbus, Ohio–based insurance company that leverages mobile technology and data analytics to offer personalized auto insurance policies. Founded in 2015 by Alex Timm and Dan Manges, Root set out to transform traditional underwriting by focusing on individual driving behavior rather than broad demographic factors.
The company’s core product is usage-based auto insurance, delivered through a smartphone app that monitors driving patterns such as speed, braking and phone usage behind the wheel.