Root (NASDAQ:ROOT) Shares Gap Up - Still a Buy?

Key Points

• Shares gapped up premarket from $53.96 to an open of $57.05 and were last trading near $56.57 on a volume of 12,051 shares.
• Analyst consensus is an average "Hold" (two Buys, five Holds) with several recent price-target cuts — notably Wells Fargo and UBS to $52 — though MarketBeat's average target is $92.40.
• Q4 beat: Root reported $0.31 EPS vs. $0.03 expected and revenue of $397M (up 21.5% YoY), and institutional ownership is high at about 59.82% after several large investors materially increased positions.

Shares of Root, Inc. (NASDAQ:ROOT - Get Free Report) gapped up prior to trading on Monday . The stock had previously closed at $53.96, but opened at $57.05. Root shares last traded at $56.57, with a volume of 12,051 shares trading hands.

Wall Street Analysts Forecast Growth

ROOT has been the topic of a number of recent research reports. Weiss Ratings raised Root from a "sell (d+)" rating to a "hold (c)" rating in a research note on Thursday, February 26th. Wall Street Zen raised shares of Root from a "sell" rating to a "hold" rating in a research note on Saturday, February 28th. Keefe, Bruyette & Woods cut 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. Wells Fargo & Company cut their target price on shares of Root from $70.00 to $52.00 and set an "equal weight" rating for the company in a research note on Thursday, April 9th. Finally, UBS Group cut their target price on shares of 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 data from MarketBeat.com, the company presently has an average rating of "Hold" and an average price target of $92.40.

Root Stock Down 2.1%

The firm has a 50-day simple moving average of $49.63 and a 200 day simple moving average of $66.08. 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 company has a market capitalization of $879.02 million, a PE ratio of 24.35 and a beta of 2.90.

Root (NASDAQ:ROOT - Get Free Report) last released its quarterly earnings data on Wednesday, February 25th. The company reported $0.31 EPS for the quarter, beating the consensus estimate of $0.03 by $0.28. Root had a return on equity of 15.34% and a net margin of 2.58%.The company had revenue of $397.00 million for the quarter, compared to analyst estimates of $381.57 million. During the same period last year, the company posted $1.30 earnings per share. The firm's revenue was up 21.5% compared to the same quarter last year. On average, research analysts predict that Root, Inc. will post 2.15 EPS for the current fiscal year.

Institutional Trading of Root

Large investors have recently modified their holdings of the business. Millennium Management LLC raised its position in shares of Root by 780.1% in the 4th quarter. Millennium Management LLC now owns 220,815 shares of the company's stock valued at $15,949,000 after purchasing an additional 195,725 shares in the last quarter. UBS Group AG grew its stake in Root by 372.1% in the third quarter. UBS Group AG now owns 228,738 shares of the company's stock worth $20,474,000 after purchasing an additional 180,289 shares in the last quarter. Findell Capital Management LLC grew its stake in Root by 291.7% in the fourth quarter. Findell Capital Management LLC now owns 235,000 shares of the company's stock worth $16,974,000 after purchasing an additional 175,000 shares in the last quarter. Capital Research Global Investors grew its stake in Root by 31.7% in the fourth quarter. Capital Research Global Investors now owns 654,252 shares of the company's stock worth $47,257,000 after purchasing an additional 157,654 shares in the last quarter. Finally, Vanguard Group Inc. grew its stake in Root by 25.9% in the third quarter. Vanguard Group Inc. now owns 724,541 shares of the company's stock worth $64,854,000 after purchasing an additional 149,064 shares in the last quarter. 59.82% of the stock is currently 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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