Root (NASDAQ:ROOT) Shares Down 4.9% - Should You Sell?

Key Points

• Root, Inc. shares fell by 4.9%, trading at $81.62 after hitting a low of $83.00 during the day.
• Analysts have downgraded Root's ratings, with two analysts rating it as a Buy, seven as Hold, and one as Sell, revealing a current average target price of $124.40.
• The company recently reported earnings exceeding expectations with a 32.4% year-over-year revenue growth, bringing in $382.90 million for the quarter.

Root, Inc. (NASDAQ:ROOT - Get Free Report) dropped 4.9% on Wednesday . The company traded as low as $83.00 and last traded at $81.62. Approximately 131,548 shares traded hands during mid-day trading, a decline of 76% from the average daily volume of 544,545 shares. The stock had previously closed at $85.83.

Analyst Ratings Changes

A number of equities research analysts recently commented on the company. Keefe, Bruyette & Woods decreased their target price on Root from $170.00 to $165.00 and set an "outperform" rating on the stock in a research report on Friday, August 8th. Jefferies Financial Group decreased their target price on Root from $172.00 to $138.00 and set a "buy" rating on the stock in a research report on Monday, August 11th. Wall Street Zen downgraded Root from a "buy" rating to a "hold" rating in a research report on Saturday, August 2nd. Weiss Ratings restated a "hold (c)" rating on shares of Root in a research report on Wednesday, October 8th. Finally, Zacks Research downgraded Root from a "hold" rating to a "strong sell" rating in a research report on Tuesday, October 7th. Two research analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat, Root presently has an average rating of "Hold" and an average price target of $124.40.

Root Price Performance

The stock has a fifty day moving average price of $91.85 and a 200-day moving average price of $117.58. The firm has a market capitalization of $1.22 billion, a PE ratio of 15.84 and a beta of 2.22. The company has a debt-to-equity ratio of 0.82, a quick ratio of 1.26 and a current ratio of 1.26.

Root (NASDAQ:ROOT - Get Free Report) last announced its earnings results on Wednesday, August 6th. 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 38.24% and a net margin of 6.02%.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 previous year, the business earned ($0.52) EPS. The firm's revenue for the quarter was up 32.4% on a year-over-year basis. Sell-side analysts forecast that Root, Inc. will post -0.08 EPS for the current fiscal year.

Insider Activity

In related news, insider Mahtiyar Bonakdarpour sold 5,750 shares of the company's stock in a transaction dated Tuesday, September 2nd. The stock was sold at an average price of $89.74, for a total value of $516,005.00. Following the completion of the transaction, the insider owned 274,226 shares of the company's stock, valued at approximately $24,609,041.24. This represents a 2.05% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Alexander E. Timm sold 10,861 shares of the company's stock in a transaction dated Tuesday, September 2nd. The stock was sold at an average price of $88.88, for a total value of $965,325.68. Following the completion of the transaction, the chief executive officer directly owned 157,748 shares of the company's stock, valued at $14,020,642.24. The trade was a 6.44% decrease in their position. The disclosure for this sale can be found here. Insiders own 11.71% of the company's stock.

Institutional Investors Weigh In On Root

Large investors have recently made changes to their positions in the stock. Kingswood Wealth Advisors LLC purchased a new position in Root in the first quarter worth approximately $220,000. Valmark Advisers Inc. purchased a new position in Root in the first quarter valued at $918,000. KBC Group NV purchased a new position in Root in the first quarter valued at $48,000. Bank of New York Mellon Corp boosted its holdings in Root by 21.6% in the first quarter. Bank of New York Mellon Corp now owns 29,708 shares of the company's stock valued at $3,964,000 after purchasing an additional 5,270 shares during the period. Finally, Penserra Capital Management LLC acquired a new stake in Root in the first quarter valued at $2,011,000. 59.82% of the stock is currently owned by hedge funds and other institutional investors.

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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