Root (NASDAQ:ROOT) Shares Gap Up After Better-Than-Expected Earnings

Key Points

• EPS beat: Root reported earnings per share of $2.09 versus the $0.84 consensus (a $1.25 beat), while revenue was $393.5M—slightly below estimates—but up 12.5% year‑over‑year.
• Shares gapped up premarket from a $55.05 close to a $62.95 open and were last trading around $61.36 on volume of about 212,220 shares.
• Analysts are mixed but the consensus rating is a Hold with an average price target of $92.40, and institutional investors own roughly 59.8% of the company.

Shares of Root, Inc. (NASDAQ:ROOT - Get Free Report) gapped up before the market opened on Thursday following a stronger than expected earnings report. The stock had previously closed at $55.05, but opened at $62.95. Root shares last traded at $61.3610, with a volume of 212,220 shares traded.

The company reported $2.09 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.84 by $1.25. The company had revenue of $393.50 million for the quarter, compared to analyst estimates of $398.16 million. Root had a return on equity of 15.34% and a net margin of 2.58%.The business's quarterly revenue was up 12.5% compared to the same quarter last year. During the same quarter last year, the company posted $1.07 earnings per share.

Wall Street Analyst Weigh In

Several brokerages have issued reports on ROOT. Zacks Research raised Root from a "strong sell" rating to a "hold" rating in a report on Monday, January 12th. Weiss Ratings raised Root from a "sell (d+)" rating to a "hold (c)" rating in a report on Thursday, February 26th. Wells Fargo & Company dropped their price objective on Root from $70.00 to $52.00 and set an "equal weight" rating on the stock in a report on Thursday, April 9th. Wall Street Zen upgraded shares of Root from a "sell" rating to a "hold" rating in a research note on Saturday, February 28th. Finally, Keefe, Bruyette & Woods decreased their target price on shares of Root from $104.00 to $95.00 and set an "outperform" rating for the company in a research note on Tuesday, April 7th. Two equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average price target of $92.40.

Institutional Investors Weigh In On Root

Hedge funds have recently made changes to their positions in the business. New York State Common Retirement Fund boosted its stake in shares of Root by 950.0% during the third quarter. New York State Common Retirement Fund now owns 36,750 shares of the company's stock worth $3,289,000 after buying an additional 33,250 shares during the period. Vanguard Group Inc. lifted its position in Root by 25.9% in the third quarter. Vanguard Group Inc. now owns 724,541 shares of the company's stock valued at $64,854,000 after purchasing an additional 149,064 shares during the period. Proem Advisors LLC acquired a new stake in Root in the third quarter valued at about $3,279,000. Palisades Investment Partners LLC acquired a new stake in Root in the third quarter valued at about $7,314,000. Finally, Quinn Opportunity Partners LLC acquired a new stake in Root in the third quarter valued at about $3,580,000. Institutional investors and hedge funds own 59.82% of the company's stock.

Root Stock Performance

The company has a debt-to-equity ratio of 0.70, a current ratio of 1.21 and a quick ratio of 1.21. The stock has a market cap of $929.32 million, a price-to-earnings ratio of 25.57 and a beta of 2.95. The stock's 50-day moving average is $48.97 and its 200 day moving average is $64.94.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.