Root (NASDAQ:ROOT) Releases Earnings Results, Beats Expectations By $0.28 EPS

Root (NASDAQ:ROOT) released its earnings results on Wednesday. The company reported $0.31 earnings per share for the quarter, topping analysts’ consensus estimates of $0.03 by $0.28, FiscalAI reports. Root had a net margin of 3.80% and a return on equity of 23.36%. The firm had revenue of $397.00 million for the quarter, compared to the consensus estimate of $381.57 million. During the same period in the prior year, the firm earned $1.30 EPS. The company’s revenue was up 21.5% compared to the same quarter last year.

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

• Strong 2025 results and balance sheet — revenue rose 29% and net income 30%, with $1.5B in premiums, full-year net income of $40M and $312M of unencumbered capital, positioning Root to fund growth.
• Partnerships driving growth — partnerships were nearly half of Q4 new writings and are meeting profitability/loss-ratio targets, highlighted by deep integrations with Carvana, VUE (agent workflow), and a Toyota connected-vehicle telematics opt-in for instant quotes.
• AI-driven pricing advantage — management says iterative AI/ML models and vehicle/behavioral data increased LTVs >20% over 12 months, enabling lower average premiums while maintaining loss-ratio performance and improving retention.
• Near-term profitability pressure from investments — Q4 net income fell to $5M and operating income/EBITDA declined due to deliberate partnership and R&D/marketing spend; Root expects higher loss ratios (within a 60–65% target) and lower full-year net income in 2026 as it accelerates acquisition investments.

Root Stock Up 5.7%

Shares of ROOT traded up $3.28 on Wednesday, hitting $61.09. 627,367 shares of the stock traded hands, compared to its average volume of 322,887. Root has a one year low of $53.37 and a one year high of $181.14. The company has a market capitalization of $947.51 million, a PE ratio of 17.47 and a beta of 2.76. The business has a 50 day simple moving average of $67.89 and a 200 day simple moving average of $79.42. The company has a debt-to-equity ratio of 0.76, a quick ratio of 1.23 and a current ratio of 1.23.

Institutional Trading of Root

Institutional investors have recently added to or reduced their stakes in the business. Russell Investments Group Ltd. raised 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 worth $94,000 after purchasing an additional 614 shares during the last quarter. Advisory Services Network LLC bought a new stake in Root in the 3rd quarter worth about $144,000. Tower Research Capital LLC TRC increased its holdings 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 buying an additional 899 shares in the last quarter. Zurcher Kantonalbank Zurich Cantonalbank purchased a new position in Root in the 3rd quarter worth about $194,000. Finally, State of Wyoming bought a new position in Root during the 2nd quarter valued at about $213,000. 59.82% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

ROOT has been the topic of a number of recent research reports. Keefe, Bruyette & Woods restated an “outperform” rating on shares of Root in a report on Friday, November 7th. Zacks Research raised Root from a “strong sell” rating to a “hold” rating in a research report on Monday, January 12th. Wall Street Zen lowered Root from a “hold” rating to a “sell” rating in a research report on Sunday, January 18th. Weiss Ratings reiterated a “sell (d+)” rating on shares of Root in a research note on Monday, December 29th. Finally, Wells Fargo & Company set a $75.00 target price on Root and gave the stock an “equal weight” rating in a report on Tuesday, January 13th. Two analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, Root has an average rating of “Hold” and a consensus target price of $121.60.

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.