Zacks Research Downgrades Root (NASDAQ:ROOT) to Strong Sell

Key Points

• Zacks Research has downgraded Root (NASDAQ:ROOT) from a "hold" rating to a "strong sell" rating, indicating growing concerns among analysts about the company's performance.
• Various analysts have adjusted their price targets for Root, with a significant reduction from Jefferies Financial Group, dropping from $172.00 to $138.00, while Wells Fargo lowered their target from $120.00 to $89.00.
• Root's recent earnings report showed an EPS of $1.29, exceeding expectations, but the company's stock continues to face headwinds, leading to a consensus rating of "Hold" among market analysts.

Root (NASDAQ:ROOT - Get Free Report) was downgraded by stock analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a report released on Tuesday,Zacks.com reports.

Several other analysts also recently issued reports on the company. Jefferies Financial Group reduced their price target on Root from $172.00 to $138.00 and set a "buy" rating for the company in a research note on Monday, August 11th. Wells Fargo & Company cut their target price on Root from $120.00 to $89.00 and set an "equal weight" rating for the company in a research report on Wednesday. Weiss Ratings reiterated a "hold (c)" rating on shares of Root in a research report on Wednesday. Keefe, Bruyette & Woods cut their target price on Root from $170.00 to $165.00 and set an "outperform" rating for the company in a research report on Friday, August 8th. Finally, TD Cowen upped their target price on Root from $51.00 to $125.00 and gave the company a "hold" rating in a research report on Tuesday, July 8th. Two investment analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, Root currently has a consensus rating of "Hold" and an average target price of $118.67.

Root Stock Performance

ROOT opened at $81.73 on Tuesday. The business has a fifty day simple moving average of $94.85 and a 200 day simple moving average of $119.87. The company has a market capitalization of $1.26 billion, a PE ratio of 16.31 and a beta of 2.22. Root has a 1 year low of $36.87 and a 1 year high of $181.14. 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 (NASDAQ:ROOT - Get Free Report) last released its quarterly earnings results on Wednesday, August 6th. The company reported $1.29 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.06 by $0.23. The business had revenue of $382.90 million during the quarter, compared to the consensus estimate of $348.36 million. Root had a return on equity of 38.24% and a net margin of 6.02%.The firm's quarterly revenue was up 32.4% on a year-over-year basis. During the same period in the previous year, the company posted ($0.52) EPS. Research analysts expect that Root will post -0.08 EPS for the current year.

Insider Transactions at Root

In other Root news, CEO Alexander E. Timm sold 10,861 shares of the company's stock in a transaction dated Tuesday, September 2nd. The stock was sold at an average price of $88.88, for a total value of $965,325.68. Following the completion of the transaction, the chief executive officer owned 157,748 shares of the company's stock, valued at $14,020,642.24. This represents a 6.44% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Mahtiyar Bonakdarpour sold 5,750 shares of the company's stock in a transaction dated Tuesday, September 2nd. The stock was sold at an average price of $89.74, for a total value of $516,005.00. Following the completion of the transaction, the insider directly owned 274,226 shares of the company's stock, valued at approximately $24,609,041.24. The trade was a 2.05% decrease in their position. The disclosure for this sale can be found here. 11.76% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Root

A number of institutional investors and hedge funds have recently bought and sold shares of the company. Gilder Gagnon Howe & Co. LLC increased its holdings in Root by 3.0% in the 2nd quarter. Gilder Gagnon Howe & Co. LLC now owns 6,225 shares of the company's stock worth $797,000 after purchasing an additional 181 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its holdings in Root by 4.7% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 5,141 shares of the company's stock worth $686,000 after purchasing an additional 229 shares in the last quarter. Ameritas Investment Partners Inc. increased its holdings in Root by 28.5% in the 2nd quarter. Ameritas Investment Partners Inc. now owns 1,087 shares of the company's stock worth $139,000 after purchasing an additional 241 shares in the last quarter. Twin Tree Management LP acquired a new position in Root in the 1st quarter worth about $37,000. Finally, ProShare Advisors LLC increased its stake in shares of Root by 16.9% in the second quarter. ProShare Advisors LLC now owns 2,184 shares of the company's stock valued at $279,000 after buying an additional 315 shares during the period. 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.

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