Root (NASDAQ:ROOT) Stock Price Down 7.4% - What's Next?

Key Points

• Root shares fell 7.4% to about $53.76 in mid-day trading, with volume down 70% versus the average session.
• Analysts remain cautious, with a consensus “Hold” rating from seven analysts and an average price target of $86; targets range from $50 to $95.
• Root’s latest quarter showed mixed results: EPS of $2.09 significantly exceeded estimates, while revenue of $393.5 million fell slightly short of expectations but increased 12.5% year over year. Institutional investors own nearly 60% of the company.

Root, Inc. (NASDAQ:ROOT - Get Free Report)'s stock price traded down 7.4% during mid-day trading on Friday . The company traded as low as $53.92 and last traded at $53.7560. 89,115 shares changed hands during mid-day trading, a decline of 70% from the average session volume of 298,608 shares. The stock had previously closed at $58.04.

Analyst Upgrades and Downgrades

Several equities research analysts have recently commented on the company. Wells Fargo & Company increased their price objective on Root from $58.00 to $61.00 and gave the company an "equal weight" rating in a report on Thursday, July 9th. TD Cowen restated a "hold" rating on shares of Root in a report on Wednesday, June 17th. Weiss Ratings raised shares of Root from a "hold (c-)" rating to a "hold (c)" rating in a report on Tuesday. UBS Group set a $50.00 price objective on shares of Root and gave the stock a "neutral" rating in a research report on Monday, May 11th. Finally, Keefe, Bruyette & Woods decreased their target price on Root from $104.00 to $95.00 and set an "outperform" rating on the stock in a research report on Tuesday, April 7th. Two research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average target price of $86.00.

Root Stock Down 5.4%

The firm has a 50 day moving average of $57.04 and a two-hundred day moving average of $55.85. The firm has a market capitalization of $869.16 million, a price-to-earnings ratio of 16.40 and a beta of 2.85. The company has a quick ratio of 1.07, a current ratio of 1.07 and a debt-to-equity ratio of 0.61.

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

Institutional Trading of Root

A number of hedge funds have recently added to or reduced their stakes in the stock. AQR Capital Management LLC increased its holdings in shares of Root by 122.2% during the first quarter. AQR Capital Management LLC now owns 10,229 shares of the company's stock worth $1,365,000 after buying an additional 5,626 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its stake in shares of Root by 4.7% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 5,141 shares of the company's stock valued at $686,000 after purchasing an additional 229 shares in the last quarter. JPMorgan Chase & Co. grew its holdings in shares of Root by 389.3% during the second quarter. JPMorgan Chase & Co. now owns 28,905 shares of the company's stock worth $3,699,000 after purchasing an additional 22,997 shares during the last quarter. Russell Investments Group Ltd. increased its stake in shares of Root by 511.7% in the second quarter. Russell Investments Group Ltd. now owns 734 shares of the company's stock valued at $94,000 after buying an additional 614 shares during the period. Finally, New York State Common Retirement Fund increased its stake in shares of Root by 29.6% in the second quarter. New York State Common Retirement Fund now owns 3,500 shares of the company's stock valued at $448,000 after buying an additional 800 shares during the period. Institutional investors and hedge funds own 59.82% of the company's stock.

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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