Root (NASDAQ:ROOT) Trading 8.6% Higher - Time to Buy?

Key Points

• Root, Inc. shares have surged by 8.6% in mid-day trading, reaching a high of $123.64, despite a trade volume decline of 55% from the average.
• Analyst ratings for Root are mixed, with Wall Street Zen upgrading the stock to "buy" while Wells Fargo lowered its price target, reflecting a consensus rating of "Moderate Buy."
• The company reported strong quarterly earnings with a $1.07 EPS, significantly exceeding analyst estimates, and a revenue increase of 37.2% year-over-year.

Root, Inc. (NASDAQ:ROOT - Get Free Report) shares were up 8.6% during trading on Thursday . The stock traded as high as $123.64 and last traded at $122.80. Approximately 235,612 shares changed hands during trading, a decline of 55% from the average daily volume of 528,005 shares. The stock had previously closed at $113.06.

Wall Street Analyst Weigh In

Several analysts have commented on ROOT shares. Wells Fargo & Company reduced their price objective on Root from $142.00 to $118.00 and set an "equal weight" rating for the company in a research note on Thursday, July 10th. Wall Street Zen downgraded Root from a "buy" rating to a "hold" rating in a research note on Saturday. Keefe, Bruyette & Woods increased their target price on Root from $150.00 to $170.00 and gave the stock an "outperform" rating in a research note on Thursday, May 8th. Jefferies Financial Group increased their target price on Root from $115.00 to $150.00 and gave the stock a "buy" rating in a research note on Friday, April 11th. Finally, TD Cowen increased their target price on Root from $51.00 to $125.00 and gave the stock a "hold" rating in a research note on Tuesday, July 8th. Seven research analysts have rated the stock with a hold rating, two have given a buy rating and one has issued a strong buy rating to the company's stock. Based on data from MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of $130.50.

Root Stock Down 3.6%

The firm has a fifty day moving average price of $130.01 and a 200-day moving average price of $127.35. The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 0.87. The firm has a market cap of $1.79 billion, a price-to-earnings ratio of 36.48 and a beta of 2.26.

Root (NASDAQ:ROOT - Get Free Report) last posted its quarterly earnings data on Wednesday, May 7th. The company reported $1.07 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.45 by $0.62. Root had a return on equity of 27.33% and a net margin of 4.11%. The business had revenue of $349.40 million for the quarter, compared to analysts' expectations of $305.24 million. During the same quarter last year, the firm earned ($0.42) earnings per share. The business's revenue was up 37.2% on a year-over-year basis. As a group, sell-side analysts forecast that Root, Inc. will post -0.08 EPS for the current year.

Insiders Place Their Bets

In related news, insider Mahtiyar Bonakdarpour sold 5,256 shares of the stock in a transaction on Monday, June 2nd. The stock was sold at an average price of $130.60, for a total value of $686,433.60. Following the transaction, the insider directly owned 281,645 shares of the company's stock, valued at approximately $36,782,837. This trade represents a 1.83% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, Director Julie Szudarek sold 2,790 shares of the stock in a transaction on Thursday, June 5th. The stock was sold at an average price of $133.80, for a total value of $373,302.00. Following the completion of the transaction, the director directly owned 13,332 shares in the company, valued at $1,783,821.60. This trade represents a 17.31% decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last ninety days, insiders sold 21,083 shares of company stock worth $2,805,069. Corporate insiders own 11.76% of the company's stock.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in the company. Teacher Retirement System of Texas purchased a new position in shares of Root in the 2nd quarter worth $318,000. Y Intercept Hong Kong Ltd purchased a new position in Root in the second quarter valued at about $777,000. Nordea Investment Management AB raised its position in Root by 1.7% in the second quarter. Nordea Investment Management AB now owns 22,193 shares of the company's stock valued at $2,858,000 after purchasing an additional 369 shares during the period. Bayforest Capital Ltd raised its position in Root by 60.2% in the second quarter. Bayforest Capital Ltd now owns 4,337 shares of the company's stock valued at $555,000 after purchasing an additional 1,630 shares during the period. Finally, TD Asset Management Inc raised its position in Root by 32.6% in the second quarter. TD Asset Management Inc now owns 16,214 shares of the company's stock valued at $2,075,000 after purchasing an additional 3,982 shares during the period. 59.82% of the stock is owned by hedge funds and other institutional investors.

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.