Root (NASDAQ:ROOT) Sees Strong Trading Volume on Earnings Beat

Key Points

• Root, Inc. reported earnings per share of $1.29 for the quarter, exceeding expectations by $0.23, and achieved a revenue of $382.90 million, a 32.4% increase year-over-year.
• The company's stock experienced a significant trading volume increase, with 783,002 shares traded, up 47% from the previous day, despite its price dropping to $100.21 from a previous close of $122.55.
• Recent analyst ratings show a mix of opinions, with seven holding ratings, two buys, and one strong buy, establishing a consensus price target of $130.83.

Shares of Root, Inc. (NASDAQ:ROOT - Get Free Report) saw strong trading volume on Thursday following a better than expected earnings announcement. 783,002 shares were traded during trading, an increase of 47% from the previous session's volume of 531,491 shares.The stock last traded at $100.21 and had previously closed at $122.55.

The company reported $1.29 earnings per share for the quarter, topping the consensus estimate of $1.06 by $0.23. Root had a return on equity of 27.33% and a net margin of 4.11%. The firm had revenue of $382.90 million for the quarter, compared to the consensus estimate of $348.36 million. During the same period in the prior year, the business posted ($0.52) earnings per share. The firm's revenue for the quarter was up 32.4% compared to the same quarter last year.

Analyst Ratings Changes

Several equities analysts recently weighed in on the company. TD Cowen increased their target price on Root from $51.00 to $125.00 and gave the stock a "hold" rating in a research report on Tuesday, July 8th. Wall Street Zen downgraded Root from a "buy" rating to a "hold" rating in a report on Saturday, August 2nd. Jefferies Financial Group raised their price objective on Root from $115.00 to $150.00 and gave the stock a "buy" rating in a report on Friday, April 11th. Keefe, Bruyette & Woods raised their price objective on Root from $150.00 to $170.00 and gave the stock an "outperform" rating in a report on Thursday, May 8th. Finally, Wells Fargo & Company raised their price objective on Root from $118.00 to $120.00 and gave the stock an "equal weight" rating in a report on Thursday. Seven equities research analysts have rated the stock with a hold rating, two have issued a buy rating and one has assigned a strong buy rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus price target of $130.83.

Insider Buying and Selling at Root

In related news, Director Julie Szudarek sold 2,790 shares of the firm's stock in a transaction dated Thursday, June 5th. The stock was sold at an average price of $133.80, for a total transaction of $373,302.00. Following the sale, the director directly owned 13,332 shares in the company, valued at approximately $1,783,821.60. This trade represents a 17.31% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, insider Mahtiyar Bonakdarpour sold 5,256 shares of the firm's stock in a transaction that occurred on Monday, June 2nd. The shares were sold at an average price of $130.60, for a total value of $686,433.60. Following the sale, the insider owned 281,645 shares of the company's stock, valued at approximately $36,782,837. This trade represents a 1.83% decrease in their position. The disclosure for this sale can be found here. In the last quarter, insiders sold 21,083 shares of company stock worth $2,805,069. Insiders own 11.76% of the company's stock.

Institutional Investors Weigh In On Root

A number of hedge funds have recently bought and sold shares of the business. Mitsubishi UFJ Asset Management Co. Ltd. grew its stake in Root by 183.5% during the 2nd quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 6,225 shares of the company's stock valued at $797,000 after purchasing an additional 4,029 shares in the last quarter. Los Angeles Capital Management LLC acquired a new stake in Root during the 2nd quarter valued at approximately $1,121,000. Fox Run Management L.L.C. grew its stake in Root by 37.7% during the 2nd quarter. Fox Run Management L.L.C. now owns 14,770 shares of the company's stock valued at $1,890,000 after purchasing an additional 4,041 shares in the last quarter. Versor Investments LP acquired a new stake in Root during the 2nd quarter valued at approximately $422,000. Finally, Teacher Retirement System of Texas acquired a new stake in Root during the 2nd quarter valued at approximately $318,000. Institutional investors and hedge funds own 59.82% of the company's stock.

Root Trading Down 20.2%

The business has a 50 day simple moving average of $129.56 and a two-hundred day simple moving average of $127.81. The company has a current ratio of 1.26, a quick ratio of 1.26 and a debt-to-equity ratio of 0.87. The stock has a market cap of $1.50 billion, a price-to-earnings ratio of 30.73 and a beta of 2.25.

About Root

Root, Inc provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies.

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