Root (NASDAQ:ROOT) Releases Quarterly Earnings Results, Beats Expectations By $1.25 EPS

Root (NASDAQ:ROOT) posted its quarterly earnings data on Wednesday. The company reported $2.09 earnings per share for the quarter, beating the consensus estimate of $0.84 by $1.25, FiscalAI reports. The business 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 15.34% and a net margin of 2.58%.The company’s revenue was up 12.5% compared to the same quarter last year. During the same period in the prior year, the company earned $1.07 earnings per share.

Here are the key takeaways from Root’s conference call:

• Root reported its most profitable quarter ever, generating an annualized ROE of 47% and record net income of $36 million (operating income $41M, adjusted EBITDA $57M).
• Distribution is diversifying and scaling — partnerships grew new writings 30% year-over-year, the company now partners with over 15,000 agents across 5,000 agencies, and Carvana embedded sales surpassed 200,000 policies.
• Management strengthened capital flexibility by refinancing a $200 million facility to lower interest expense by roughly $5 million annually and the board authorized a $75 million share repurchase program while continuing investment in technology and growth.
• Root said the direct channel became more competitive during the quarter, prompting disciplined pullbacks in direct marketing spend and warning that near-term PIF and premium growth may remain muted if those conditions persist.

Root Stock Performance

Shares of Root stock traded up $0.15 during trading hours on Wednesday, hitting $55.05. 412,022 shares of the company were exchanged, compared to its average volume of 290,138. Root has a 1 year low of $40.91 and a 1 year high of $162.99. The company has a current ratio of 1.21, a quick ratio of 1.21 and a debt-to-equity ratio of 0.70. The business has a 50-day moving average of $48.97 and a 200-day moving average of $64.94. The stock has a market capitalization of $856.58 million, a price-to-earnings ratio of 23.73 and a beta of 2.95.

Analyst Upgrades and Downgrades

Several equities research analysts have recently weighed in on ROOT shares. Wells Fargo & Company decreased their price objective on Root from $70.00 to $52.00 and set an “equal weight” rating for the company in a report on Thursday, April 9th. UBS Group decreased their price objective on Root from $90.00 to $52.00 and set a “neutral” rating for the company in a report on Monday, March 9th. Wall Street Zen raised Root from a “sell” rating to a “hold” rating in a report on Saturday, February 28th. Keefe, Bruyette & Woods decreased their price objective on Root from $104.00 to $95.00 and set an “outperform” rating for the company in a report on Tuesday, April 7th. Finally, Weiss Ratings raised Root from a “sell (d+)” rating to a “hold (c)” rating in a report on Thursday, February 26th. Two research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company’s stock. Based on data from MarketBeat, the company presently has an average rating of “Hold” and an average price target of $92.40.

Institutional Investors Weigh In On Root

Several large investors have recently modified their holdings of the stock. T. Rowe Price Investment Management Inc. raised its stake in shares of Root by 8.5% during the fourth quarter. T. Rowe Price Investment Management Inc. now owns 946,632 shares of the company’s stock worth $68,376,000 after purchasing an additional 74,427 shares during the last quarter. Geode Capital Management LLC raised its stake in shares of Root by 4.1% during the fourth quarter. Geode Capital Management LLC now owns 310,967 shares of the company’s stock worth $22,466,000 after purchasing an additional 12,238 shares during the last quarter. State Street Corp raised its stake in shares of Root by 5.0% during the fourth quarter. State Street Corp now owns 258,168 shares of the company’s stock worth $18,647,000 after purchasing an additional 12,321 shares during the last quarter. UBS Group AG raised its stake in shares of Root by 372.1% during 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 during the last quarter. Finally, Millennium Management LLC raised its stake in shares of Root by 780.1% during the fourth quarter. Millennium Management LLC now owns 220,815 shares of the company’s stock worth $15,949,000 after purchasing an additional 195,725 shares during the last quarter. Hedge funds and other institutional investors own 59.82% of the company’s stock.

About Root

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.