Root (NASDAQ:ROOT) Posts Quarterly Earnings Results, Beats Estimates By $0.28 EPS

by · The Cerbat Gem

Root (NASDAQ:ROOT – Get Free Report) released its quarterly earnings data on Wednesday. The company reported $0.31 earnings per share for the quarter, beating the consensus estimate of $0.03 by $0.28, FiscalAI reports. The firm had revenue of $397.00 million during the quarter, compared to analysts’ expectations of $381.57 million. Root had a net margin of 3.80% and a return on equity of 23.36%. The firm’s quarterly revenue was up 21.5% on a year-over-year basis. During the same period in the previous year, the company earned $1.30 earnings per share.

Here are the key takeaways from Root’s conference call:

  • Strong 2025 results and balance sheet — revenue rose 29% and net income 30%, with $1.5B in premiums, full-year net income of $40M and $312M of unencumbered capital, positioning Root to fund growth.
  • Partnerships driving growth — partnerships were nearly half of Q4 new writings and are meeting profitability/loss-ratio targets, highlighted by deep integrations with Carvana, VUE (agent workflow), and a Toyota connected-vehicle telematics opt-in for instant quotes.
  • AI-driven pricing advantage — management says iterative AI/ML models and vehicle/behavioral data increased LTVs >20% over 12 months, enabling lower average premiums while maintaining loss-ratio performance and improving retention.
  • Near-term profitability pressure from investments — Q4 net income fell to $5M and operating income/EBITDA declined due to deliberate partnership and R&D/marketing spend; Root expects higher loss ratios (within a 60–65% target) and lower full-year net income in 2026 as it accelerates acquisition investments.

Root Stock Performance

Shares of ROOT stock traded up $3.28 during trading hours on Wednesday, reaching $61.09. 627,367 shares of the company traded hands, compared to its average volume of 322,887. Root has a 12-month low of $53.37 and a 12-month high of $181.14. The company has a debt-to-equity ratio of 0.76, a current ratio of 1.23 and a quick ratio of 1.23. The company has a market cap of $947.51 million, a P/E ratio of 17.47 and a beta of 2.76. The firm has a 50-day moving average price of $67.89 and a 200 day moving average price of $79.42.

Hedge Funds Weigh In On Root

Hedge funds have recently modified their holdings of the company. T. Rowe Price Investment Management Inc. increased its stake in shares of Root by 8.5% in the fourth quarter. T. Rowe Price Investment Management Inc. now owns 946,632 shares of the company’s stock worth $68,376,000 after purchasing an additional 74,427 shares in the last quarter. Geode Capital Management LLC lifted its stake in shares of Root by 4.1% during the 4th quarter. Geode Capital Management LLC now owns 310,967 shares of the company’s stock valued at $22,466,000 after buying an additional 12,238 shares in the last quarter. State Street Corp boosted its holdings in Root by 5.0% in 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 boosted its holdings in Root by 372.1% in 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 increased its stake in Root by 780.1% in 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 in the last quarter. 59.82% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

A number of brokerages have weighed in on ROOT. Wall Street Zen lowered shares of Root from a “hold” rating to a “sell” rating in a research note on Sunday, January 18th. Zacks Research raised Root from a “strong sell” rating to a “hold” rating in a report on Monday, January 12th. Weiss Ratings reissued a “sell (d+)” rating on shares of Root in a report on Monday, December 29th. Wells Fargo & Company set a $75.00 target price on Root and gave the stock an “equal weight” rating in a research report on Tuesday, January 13th. Finally, Keefe, Bruyette & Woods restated an “outperform” rating on shares of Root in a research note on Friday, November 7th. Two investment analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, the stock has a consensus rating of “Hold” and an average price target of $121.60.

Get Our Latest Stock Report on ROOT

Root Company Profile

(Get Free Report)

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.

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