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ROOTS CORP (ROOT.CA) Stock Fundamental Analysis

TSX:ROOT - Toronto Stock Exchange - CA7766521099 - Common Stock - Currency: CAD

2.35  -0.01 (-0.42%)

Fundamental Rating

4

ROOT gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 15 industry peers in the Specialty Retail industry. While ROOT is still in line with the averages on profitability rating, there are concerns on its financial health. ROOT is valued quite cheap, while showing a decent growth score. This is a good combination!


Dividend Valuation Growth Profitability Health

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4

1. Profitability

1.1 Basic Checks

ROOT had positive earnings in the past year.
In the past year ROOT had a positive cash flow from operations.
Of the past 5 years ROOT 4 years were profitable.
Each year in the past 5 years ROOT had a positive operating cash flow.
ROOT.CA Yearly Net Income VS EBIT VS OCF VS FCFROOT.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20M -20M 40M -40M -60M

1.2 Ratios

ROOT has a worse Return On Assets (0.78%) than 60.00% of its industry peers.
The Return On Equity of ROOT (1.60%) is worse than 60.00% of its industry peers.
With a Return On Invested Capital value of 3.02%, ROOT perfoms like the industry average, outperforming 46.67% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ROOT is in line with the industry average of 6.55%.
Industry RankSector Rank
ROA 0.78%
ROE 1.6%
ROIC 3.02%
ROA(3y)2.67%
ROA(5y)-0.54%
ROE(3y)5.59%
ROE(5y)-3.29%
ROIC(3y)5.26%
ROIC(5y)4.85%
ROOT.CA Yearly ROA, ROE, ROICROOT.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 -10 -20 -30 -40

1.3 Margins

The Profit Margin of ROOT (1.11%) is worse than 60.00% of its industry peers.
In the last couple of years the Profit Margin of ROOT has declined.
ROOT has a Operating Margin (5.07%) which is in line with its industry peers.
In the last couple of years the Operating Margin of ROOT has declined.
ROOT has a Gross Margin of 58.61%. This is amongst the best in the industry. ROOT outperforms 100.00% of its industry peers.
ROOT's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 5.07%
PM (TTM) 1.11%
GM 58.61%
OM growth 3Y-26.23%
OM growth 5Y-6.46%
PM growth 3Y-49.52%
PM growth 5Y-27.37%
GM growth 3Y-0.05%
GM growth 5Y0.26%
ROOT.CA Yearly Profit, Operating, Gross MarginsROOT.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 40

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3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ROOT is destroying value.
Compared to 1 year ago, ROOT has less shares outstanding
Compared to 5 years ago, ROOT has less shares outstanding
Compared to 1 year ago, ROOT has an improved debt to assets ratio.
ROOT.CA Yearly Shares OutstandingROOT.CA Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M 40M
ROOT.CA Yearly Total Debt VS Total AssetsROOT.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M

2.2 Solvency

Based on the Altman-Z score of 1.13, we must say that ROOT is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ROOT (1.13) is worse than 66.67% of its industry peers.
The Debt to FCF ratio of ROOT is 4.79, which is a neutral value as it means it would take ROOT, 4.79 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ROOT (4.79) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.56 indicates that ROOT is somewhat dependend on debt financing.
ROOT's Debt to Equity ratio of 0.56 is in line compared to the rest of the industry. ROOT outperforms 60.00% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.56
Debt/FCF 4.79
Altman-Z 1.13
ROIC/WACC0.43
WACC6.97%
ROOT.CA Yearly LT Debt VS Equity VS FCFROOT.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50M 100M 150M 200M

2.3 Liquidity

ROOT has a Current Ratio of 1.31. This is a normal value and indicates that ROOT is financially healthy and should not expect problems in meeting its short term obligations.
ROOT's Current ratio of 1.31 is fine compared to the rest of the industry. ROOT outperforms 66.67% of its industry peers.
ROOT has a Quick Ratio of 1.31. This is a bad value and indicates that ROOT is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.40, ROOT is not doing good in the industry: 73.33% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.31
Quick Ratio 0.4
ROOT.CA Yearly Current Assets VS Current LiabilitesROOT.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M

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4

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 71.43% over the past year.
ROOT shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -29.82% yearly.
Looking at the last year, ROOT shows a decrease in Revenue. The Revenue has decreased by -2.09% in the last year.
The Revenue has been decreasing by -4.40% on average over the past years.
EPS 1Y (TTM)71.43%
EPS 3Y-41.52%
EPS 5Y-29.82%
EPS Q2Q%600%
Revenue 1Y (TTM)-2.09%
Revenue growth 3Y2.98%
Revenue growth 5Y-4.4%
Sales Q2Q%5.31%

3.2 Future

Based on estimates for the next years, ROOT will show a very strong growth in Earnings Per Share. The EPS will grow by 98.81% on average per year.
ROOT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.22% yearly.
EPS Next Y78.5%
EPS Next 2Y98.81%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year3.81%
Revenue Next 2Y2.22%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
ROOT.CA Yearly Revenue VS EstimatesROOT.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 100M 200M 300M
ROOT.CA Yearly EPS VS EstimatesROOT.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.2 0.4 0.6

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7

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 19.58, the valuation of ROOT can be described as rather expensive.
ROOT's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 29.35. ROOT is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 7.43 indicates a rather cheap valuation of ROOT.
ROOT's Price/Forward Earnings ratio is rather cheap when compared to the industry. ROOT is cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, ROOT is valued rather cheaply.
Industry RankSector Rank
PE 19.58
Fwd PE 7.43
ROOT.CA Price Earnings VS Forward Price EarningsROOT.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

86.67% of the companies in the same industry are more expensive than ROOT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ROOT is valued a bit cheaper than the industry average as 80.00% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 3.65
EV/EBITDA 5.06
ROOT.CA Per share dataROOT.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6

4.3 Compensation for Growth

ROOT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ROOT's earnings are expected to grow with 98.81% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.25
PEG (5Y)N/A
EPS Next 2Y98.81%
EPS Next 3YN/A

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0

5. Dividend

5.1 Amount

ROOT does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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ROOTS CORP

TSX:ROOT (3/7/2025, 7:00:00 PM)

2.35

-0.01 (-0.42%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)12-11 2024-12-11/bmo
Earnings (Next)04-08 2025-04-08/amc
Inst Owners0.01%
Inst Owner ChangeN/A
Ins Owners0.14%
Ins Owner ChangeN/A
Market Cap95.06M
Analysts82.86
Price Target3.32 (41.28%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)30.11%
Min EPS beat(2)22.97%
Max EPS beat(2)37.25%
EPS beat(4)4
Avg EPS beat(4)21.13%
Min EPS beat(4)6.63%
Max EPS beat(4)37.25%
EPS beat(8)5
Avg EPS beat(8)2.8%
EPS beat(12)7
Avg EPS beat(12)-3.27%
EPS beat(16)11
Avg EPS beat(16)8.89%
Revenue beat(2)1
Avg Revenue beat(2)-3.12%
Min Revenue beat(2)-10.02%
Max Revenue beat(2)3.79%
Revenue beat(4)1
Avg Revenue beat(4)-3.82%
Min Revenue beat(4)-10.02%
Max Revenue beat(4)3.79%
Revenue beat(8)3
Avg Revenue beat(8)-2.38%
Revenue beat(12)6
Avg Revenue beat(12)-1.25%
Revenue beat(16)7
Avg Revenue beat(16)-1.18%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.5%
EPS NY rev (1m)0%
EPS NY rev (3m)-12.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.66%
Valuation
Industry RankSector Rank
PE 19.58
Fwd PE 7.43
P/S 0.37
P/FCF 3.65
P/OCF 2.89
P/B 0.53
P/tB N/A
EV/EBITDA 5.06
EPS(TTM)0.12
EY5.11%
EPS(NY)0.32
Fwd EY13.46%
FCF(TTM)0.64
FCFY27.36%
OCF(TTM)0.81
OCFY34.54%
SpS6.44
BVpS4.44
TBVpS-0.26
PEG (NY)0.25
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 0.78%
ROE 1.6%
ROCE 4.35%
ROIC 3.02%
ROICexc 3.07%
ROICexgc 8.41%
OM 5.07%
PM (TTM) 1.11%
GM 58.61%
FCFM 9.99%
ROA(3y)2.67%
ROA(5y)-0.54%
ROE(3y)5.59%
ROE(5y)-3.29%
ROIC(3y)5.26%
ROIC(5y)4.85%
ROICexc(3y)5.85%
ROICexc(5y)5.24%
ROICexgc(3y)18.05%
ROICexgc(5y)15.22%
ROCE(3y)7.56%
ROCE(5y)6.98%
ROICexcg growth 3Y-17.92%
ROICexcg growth 5Y-11.45%
ROICexc growth 3Y-21.35%
ROICexc growth 5Y-7.35%
OM growth 3Y-26.23%
OM growth 5Y-6.46%
PM growth 3Y-49.52%
PM growth 5Y-27.37%
GM growth 3Y-0.05%
GM growth 5Y0.26%
F-Score7
Asset Turnover0.7
Health
Industry RankSector Rank
Debt/Equity 0.56
Debt/FCF 4.79
Debt/EBITDA 2.37
Cap/Depr 23.29%
Cap/Sales 2.62%
Interest Coverage 3.87
Cash Conversion 77.22%
Profit Quality 903.16%
Current Ratio 1.31
Quick Ratio 0.4
Altman-Z 1.13
F-Score7
WACC6.97%
ROIC/WACC0.43
Cap/Depr(3y)17.55%
Cap/Depr(5y)23.85%
Cap/Sales(3y)1.93%
Cap/Sales(5y)2.79%
Profit Quality(3y)803.71%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)71.43%
EPS 3Y-41.52%
EPS 5Y-29.82%
EPS Q2Q%600%
EPS Next Y78.5%
EPS Next 2Y98.81%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-2.09%
Revenue growth 3Y2.98%
Revenue growth 5Y-4.4%
Sales Q2Q%5.31%
Revenue Next Year3.81%
Revenue Next 2Y2.22%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y25.79%
EBIT growth 3Y-24.03%
EBIT growth 5Y-10.58%
EBIT Next Year262.5%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-28.38%
FCF growth 3Y-10.67%
FCF growth 5YN/A
OCF growth 1Y-22.11%
OCF growth 3Y-8.75%
OCF growth 5Y14.86%