Root (NASDAQ:ROOT) Hits New 1-Year Low - Should You Sell?

Key Points

• Root hit a new 52-week low of $40.91 on Monday and last traded around $44.97 on volume of ~269,274 shares, trading well below its 50- and 200-day moving averages ($53.21 and $70.47) with a market cap of about $697M.
• Analyst sentiment is a consensus Hold (two Buys, five Holds) with an average price target of $97.80, although several firms have recently cut targets (e.g., UBS to $52, KBW from $150 to $104).
• On fundamentals, Root beat quarterly EPS estimates ($0.31 vs. $0.03) and revenue grew 21.5% year-over-year, but net margin is slim (2.58%) and analysts forecast -$0.08 EPS for the current fiscal year; institutional ownership is high (~59.8%) with several funds adding to positions.

Root, Inc. (NASDAQ:ROOT - Get Free Report) reached a new 52-week low on Monday . The stock traded as low as $40.91 and last traded at $44.9650, with a volume of 269274 shares trading hands. The stock had previously closed at $43.21.

Wall Street Analyst Weigh In

ROOT has been the subject of several recent research reports. Zacks Research raised shares of Root from a "strong sell" rating to a "hold" rating in a research report on Monday, January 12th. Keefe, Bruyette & Woods reaffirmed an "outperform" rating and set a $104.00 price target (down from $150.00) on shares of Root in a research report on Thursday, February 26th. Weiss Ratings upgraded Root from a "sell (d+)" rating to a "hold (c)" rating in a report on Thursday, February 26th. Wall Street Zen upgraded Root from a "sell" rating to a "hold" rating in a research note on Saturday, February 28th. Finally, UBS Group lowered their target price on Root from $90.00 to $52.00 and set a "neutral" rating for the company in a research note on Monday, March 9th. Two analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. According to MarketBeat, the stock currently has a consensus rating of "Hold" and an average price target of $97.80.

Root Stock Performance

The company's fifty day simple moving average is $53.21 and its two-hundred day simple moving average is $70.47. The company has a market capitalization of $697.03 million, a price-to-earnings ratio of 18.83 and a beta of 2.90. The company has a debt-to-equity ratio of 0.70, a quick ratio of 1.21 and a current ratio of 1.21.

Root (NASDAQ:ROOT - Get Free Report) last issued its earnings results on Wednesday, February 25th. The company reported $0.31 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.03 by $0.28. The business had revenue of $397.00 million for the quarter, compared to analyst estimates of $381.57 million. Root had a net margin of 2.58% and a return on equity of 15.34%. The company's revenue for the quarter was up 21.5% on a year-over-year basis. During the same quarter in the prior year, the business posted $1.30 EPS. Equities research analysts predict that Root, Inc. will post -0.08 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Root

Several institutional investors and hedge funds have recently made changes to their positions in the company. Millennium Management LLC boosted its holdings in Root by 780.1% in the fourth quarter. Millennium Management LLC now owns 220,815 shares of the company's stock worth $15,949,000 after purchasing an additional 195,725 shares during the period. UBS Group AG lifted its position in shares of 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 last quarter. Findell Capital Management LLC boosted its holdings in shares of Root by 291.7% in the 4th quarter. Findell Capital Management LLC now owns 235,000 shares of the company's stock valued at $16,974,000 after buying an additional 175,000 shares during the period. Capital Research Global Investors grew its position in shares of Root by 31.7% during the 4th quarter. Capital Research Global Investors now owns 654,252 shares of the company's stock valued at $47,257,000 after buying an additional 157,654 shares during the last quarter. Finally, Vanguard Group Inc. raised its stake in Root by 25.9% during the third quarter. Vanguard Group Inc. now owns 724,541 shares of the company's stock worth $64,854,000 after acquiring an additional 149,064 shares during the period. 59.82% of the stock is owned by institutional investors and hedge funds.

Root Company Profile

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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