Root (NASDAQ:ROOT) Shares Down 7.4% - Time to Sell?

Key Points

• Root shares fell 7.4% on Wednesday, trading as low as $57.16 with volume well below average. The move came after the stock had closed at $61.73 in the prior session.
• Analyst sentiment remains mixed but cautious: Root has an average “Hold” rating, with five analysts on Hold, two on Buy, and a consensus target price of $86.00. Recent updates included UBS setting a $50 target and Wells Fargo raising its target to $61.
• Despite the stock’s drop, Root’s latest quarterly results were strong, with EPS of $2.09 beating estimates by a wide margin and revenue up 12.5% year over year. The company also posted a 19.97% return on equity and continues to draw significant institutional ownership.

Root, Inc. (NASDAQ:ROOT - Get Free Report)'s stock price dropped 7.4% on Wednesday . The stock traded as low as $57.16 and last traded at $57.18. Approximately 136,453 shares were traded during trading, a decline of 56% from the average session volume of 307,771 shares. The stock had previously closed at $61.73.

Analyst Ratings Changes

Several brokerages have issued reports on ROOT. UBS Group set a $50.00 price target on shares of Root and gave the company a "neutral" rating in a report on Monday, May 11th. Zacks Research upgraded Root from a "strong sell" rating to a "hold" rating in a research report on Monday, June 8th. Keefe, Bruyette & Woods reduced their target price on Root from $104.00 to $95.00 and set an "outperform" rating on the stock in a research note on Tuesday, April 7th. TD Cowen reiterated a "hold" rating on shares of Root in a report on Wednesday, June 17th. Finally, Wells Fargo & Company raised their price target on Root from $58.00 to $61.00 and gave the stock an "equal weight" rating in a research report on Thursday, July 9th. Two research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company's stock. According to data from MarketBeat, the stock currently has an average rating of "Hold" and a consensus target price of $86.00.

Root Stock Performance

The company has a market capitalization of $892.78 million, a PE ratio of 16.91 and a beta of 2.85. The stock's fifty day simple moving average is $56.56 and its 200-day simple moving average is $57.11. The company has a debt-to-equity ratio of 0.61, a quick ratio of 1.07 and a current ratio of 1.07.

Root (NASDAQ:ROOT - Get Free Report) last issued its quarterly earnings results on Wednesday, May 6th. The company reported $2.09 EPS for the quarter, topping analysts' consensus estimates of $0.84 by $1.25. The business had revenue of $393.50 million during the quarter, compared to the consensus estimate of $398.16 million. Root had a net margin of 3.58% and a return on equity of 19.97%. The company's quarterly revenue was up 12.5% compared to the same quarter last year. During the same period in the previous year, the firm posted $1.07 earnings per share. As a group, equities analysts predict that Root, Inc. will post 3.28 earnings per share for the current year.

Institutional Trading of Root

Several hedge funds and other institutional investors have recently bought and sold shares of ROOT. Gilder Gagnon Howe & Co. LLC increased its stake in Root by 3.0% during the second quarter. Gilder Gagnon Howe & Co. LLC now owns 6,225 shares of the company's stock worth $797,000 after acquiring an additional 181 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its holdings in shares of Root by 4.7% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 5,141 shares of the company's stock worth $686,000 after purchasing an additional 229 shares during the period. Gabelli Funds LLC lifted its stake in shares of Root by 10.9% in the 3rd quarter. Gabelli Funds LLC now owns 5,100 shares of the company's stock valued at $457,000 after purchasing an additional 500 shares in the last quarter. Swiss National Bank lifted its stake in shares of Root by 2.4% in the 4th quarter. Swiss National Bank now owns 21,500 shares of the company's stock valued at $1,553,000 after purchasing an additional 500 shares in the last quarter. Finally, Russell Investments Group Ltd. grew its holdings in shares of Root by 511.7% during the 2nd quarter. Russell Investments Group Ltd. now owns 734 shares of the company's stock worth $94,000 after purchasing an additional 614 shares during the period. 59.82% of the stock is owned by hedge funds and other institutional investors.

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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