Root (NASDAQ:ROOT) Cut to Hold at Zacks Research

Key Points

• Zacks Research downgraded Root (NASDAQ:ROOT) from a "strong-buy" rating to a "hold" rating, indicating a shift in confidence regarding the stock's performance.
• Despite this downgrade, other analysts have varying opinions, with price targets ranging from $51.00 to $172.00, and a consensus rating of "Hold" with an average target price of $123.83.
• Root's recent quarterly earnings surpassed expectations, reporting $1.29 EPS compared to the consensus estimate of $1.06, and showing a revenue increase of 32.4% year-over-year.

Root (NASDAQ:ROOT - Get Free Report) was downgraded by Zacks Research from a "strong-buy" rating to a "hold" rating in a research note issued to investors on Monday, September 8th,Zacks.com reports.

A number of other research firms have also recently issued reports on ROOT. TD Cowen boosted their price objective on Root from $51.00 to $125.00 and gave the company a "hold" rating in a report on Tuesday, July 8th. UBS Group restated a "neutral" rating and issued a $105.00 price target (down from $140.00) on shares of Root in a report on Monday, August 18th. Keefe, Bruyette & Woods reduced their price target on shares of Root from $170.00 to $165.00 and set an "outperform" rating on the stock in a research note on Friday, August 8th. Jefferies Financial Group lowered their price objective on shares of Root from $172.00 to $138.00 and set a "buy" rating for the company in a research report on Monday, August 11th. Finally, Wells Fargo & Company upped their target price on shares of Root from $118.00 to $120.00 and gave the stock an "equal weight" rating in a research note on Thursday, August 7th. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and seven have issued a Hold rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus price target of $123.83.

Root Trading Up 2.5%

Shares of ROOT traded up $2.52 during midday trading on Monday, hitting $101.60. The stock had a trading volume of 230,355 shares, compared to its average volume of 549,814. The stock's 50 day moving average is $105.37 and its 200 day moving average is $125.68. The firm has a market cap of $1.57 billion, a PE ratio of 20.21 and a beta of 2.24. The company has a debt-to-equity ratio of 0.82, a current ratio of 1.26 and a quick ratio of 1.26. Root has a 1 year low of $36.87 and a 1 year high of $181.14.

Root (NASDAQ:ROOT - Get Free Report) last posted its quarterly earnings data on Wednesday, August 6th. The company reported $1.29 earnings per share for the quarter, topping analysts' consensus estimates of $1.06 by $0.23. The company had revenue of $382.90 million for the quarter, compared to analyst estimates of $348.36 million. Root had a net margin of 6.02% and a return on equity of 38.24%. The firm's revenue for the quarter was up 32.4% on a year-over-year basis. During the same period in the prior year, the company posted ($0.52) EPS. As a group, analysts forecast that Root will post -0.08 EPS for the current fiscal year.

Insider Activity

In other Root news, CEO Alexander E. Timm sold 10,861 shares of the firm's stock in a transaction that occurred on Tuesday, September 2nd. The shares were sold at an average price of $88.88, for a total value of $965,325.68. Following the completion of the sale, the chief executive officer directly owned 157,748 shares in the company, valued at $14,020,642.24. This trade represents a 6.44% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Mahtiyar Bonakdarpour sold 5,750 shares of Root stock in a transaction on Tuesday, September 2nd. The stock was sold at an average price of $89.74, for a total transaction of $516,005.00. Following the completion of the transaction, the insider directly owned 274,226 shares in the company, valued at $24,609,041.24. This represents a 2.05% decrease in their ownership of the stock. The disclosure for this sale can be found here. Corporate insiders own 11.71% of the company's stock.

Institutional Trading of Root

A number of institutional investors have recently made changes to their positions in ROOT. Twin Tree Management LP acquired a new position in Root during the 1st quarter valued at about $37,000. KBC Group NV acquired a new position in shares of Root during the first quarter valued at about $48,000. Russell Investments Group Ltd. raised its position in shares of Root by 511.7% in the 2nd quarter. Russell Investments Group Ltd. now owns 734 shares of the company's stock valued at $94,000 after purchasing an additional 614 shares during the last quarter. Ameritas Investment Partners Inc. raised its position in shares of Root by 28.5% in the 2nd quarter. Ameritas Investment Partners Inc. now owns 1,087 shares of the company's stock valued at $139,000 after purchasing an additional 241 shares during the last quarter. Finally, Tower Research Capital LLC TRC boosted its stake in Root by 237.2% in the 2nd quarter. Tower Research Capital LLC TRC now owns 1,278 shares of the company's stock worth $164,000 after purchasing an additional 899 shares in the last quarter. Institutional investors and hedge funds own 59.82% of the company's stock.

Root Company Profile

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.