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ROOT INC/OH -CLASS A (ROOT) Stock Fundamental Analysis

NASDAQ:ROOT - Nasdaq - US77664L2079 - Common Stock - Currency: USD

116.14  +4.11 (+3.67%)

After market: 117.456 +1.32 (+1.13%)

Fundamental Rating

3

Overall ROOT gets a fundamental rating of 3 out of 10. We evaluated ROOT against 144 industry peers in the Insurance industry. While ROOT seems to be doing ok healthwise, there are quite some concerns on its profitability. ROOT is valued quite expensively, but it does show have an excellent growth rating.


Dividend Valuation Growth Profitability Health

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1

1. Profitability

1.1 Basic Checks

In the past year ROOT has reported negative net income.
ROOT had a positive operating cash flow in the past year.
ROOT had negative earnings in each of the past 5 years.
In the past 5 years ROOT always reported negative operating cash flow.
ROOT Yearly Net Income VS EBIT VS OCF VS FCFROOT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2018 2019 2020 2021 2022 2023 -100M -200M -300M -400M -500M

1.2 Ratios

Looking at the Return On Assets, with a value of -1.40%, ROOT is doing worse than 86.62% of the companies in the same industry.
Looking at the Return On Equity, with a value of -7.45%, ROOT is doing worse than 84.51% of the companies in the same industry.
ROOT has a Return On Invested Capital of 2.05%. This is comparable to the rest of the industry: ROOT outperforms 51.41% of its industry peers.
Industry RankSector Rank
ROA -1.4%
ROE -7.45%
ROIC 2.05%
ROA(3y)-24.37%
ROA(5y)-26.49%
ROE(3y)-69.99%
ROE(5y)-79.32%
ROIC(3y)N/A
ROIC(5y)N/A
ROOT Yearly ROA, ROE, ROICROOT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2018 2019 2020 2021 2022 2023 -50 -100 -150

1.3 Margins

ROOT has a Operating Margin of 3.70%. This is in the lower half of the industry: ROOT underperforms 73.24% of its industry peers.
The Profit Margin and Gross Margin are not available for ROOT so they could not be analyzed.
Industry RankSector Rank
OM 3.7%
PM (TTM) N/A
GM N/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
ROOT Yearly Profit, Operating, Gross MarginsROOT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2018 2019 2020 2021 2022 2023 -50 -100 -150

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4

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ROOT is destroying value.
Compared to 1 year ago, ROOT has more shares outstanding
Compared to 5 years ago, ROOT has more shares outstanding
Compared to 1 year ago, ROOT has an improved debt to assets ratio.
ROOT Yearly Shares OutstandingROOT Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 5M 10M
ROOT Yearly Total Debt VS Total AssetsROOT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 500M 1B 1.5B

2.2 Solvency

ROOT has an Altman-Z score of 0.03. This is a bad value and indicates that ROOT is not financially healthy and even has some risk of bankruptcy.
ROOT has a better Altman-Z score (0.03) than 70.42% of its industry peers.
The Debt to FCF ratio of ROOT is 1.80, which is an excellent value as it means it would take ROOT, only 1.80 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 1.80, ROOT perfoms like the industry average, outperforming 52.11% of the companies in the same industry.
A Debt/Equity ratio of 1.00 indicates that ROOT is somewhat dependend on debt financing.
ROOT has a Debt to Equity ratio of 1.00. This is amonst the worse of the industry: ROOT underperforms 87.32% of its industry peers.
Even though the debt/equity ratio score it not favorable for ROOT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
Industry RankSector Rank
Debt/Equity 1
Debt/FCF 1.8
Altman-Z 0.03
ROIC/WACC0.22
WACC9.48%
ROOT Yearly LT Debt VS Equity VS FCFROOT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2018 2019 2020 2021 2022 2023 0 500M 1B

2.3 Liquidity

A Current Ratio of 0.53 indicates that ROOT may have some problems paying its short term obligations.
The Current ratio of ROOT (0.53) is better than 74.65% of its industry peers.
A Quick Ratio of 0.53 indicates that ROOT may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.53, ROOT is in the better half of the industry, outperforming 74.65% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.53
Quick Ratio 0.53
ROOT Yearly Current Assets VS Current LiabilitesROOT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 50M 100M

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7

3. Growth

3.1 Past

ROOT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 90.33%, which is quite impressive.
The Revenue has grown by 215.11% in the past year. This is a very strong growth!
The Revenue has been growing by 60.07% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)90.33%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%142.72%
Revenue 1Y (TTM)215.11%
Revenue growth 3Y9.47%
Revenue growth 5Y60.07%
Sales Q2Q%165.13%

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 23.08% on average per year.
ROOT is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 34.90% yearly.
EPS Next Y94.61%
EPS Next 2Y40.47%
EPS Next 3Y28.28%
EPS Next 5Y23.08%
Revenue Next Year197.48%
Revenue Next 2Y77.97%
Revenue Next 3Y53.97%
Revenue Next 5Y34.9%

3.3 Evolution

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
ROOT Yearly Revenue VS EstimatesROOT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 500M 1B 1.5B
ROOT Yearly EPS VS EstimatesROOT Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 -20 -40 -60

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1

4. Valuation

4.1 Price/Earnings Ratio

ROOT reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Besides the negative Price/Earnings Ratio, also the Forward Price/Earnings Ratio is negative for ROOT. No positive earnings are expected for the next year.
Industry RankSector Rank
PE N/A
Fwd PE N/A
ROOT Price Earnings VS Forward Price EarningsROOT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 -100 -200 -300 -400

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ROOT is on the same level as its industry peers.
ROOT's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 10.75
EV/EBITDA 24.86
ROOT Per share dataROOT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60

4.3 Compensation for Growth

ROOT's earnings are expected to grow with 28.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y40.47%
EPS Next 3Y28.28%

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0

5. Dividend

5.1 Amount

No dividends for ROOT!.
Industry RankSector Rank
Dividend Yield N/A

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ROOT INC/OH -CLASS A

NASDAQ:ROOT (2/10/2025, 8:21:13 PM)

After market: 117.456 +1.32 (+1.13%)

116.14

+4.11 (+3.67%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)10-30 2024-10-30/amc
Earnings (Next)02-26 2025-02-26/amc
Inst Owners60.84%
Inst Owner Change-46.14%
Ins Owners4.07%
Ins Owner Change-0.07%
Market Cap1.75B
Analysts76.67
Price Target80.41 (-30.76%)
Short Float %16.44%
Short Ratio4.31
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)148.63%
Min EPS beat(2)62.56%
Max EPS beat(2)234.71%
EPS beat(4)4
Avg EPS beat(4)105.78%
Min EPS beat(4)42.46%
Max EPS beat(4)234.71%
EPS beat(8)7
Avg EPS beat(8)57.71%
EPS beat(12)11
Avg EPS beat(12)46.82%
EPS beat(16)14
Avg EPS beat(16)34.75%
Revenue beat(2)2
Avg Revenue beat(2)8.29%
Min Revenue beat(2)6.71%
Max Revenue beat(2)9.86%
Revenue beat(4)4
Avg Revenue beat(4)22.32%
Min Revenue beat(4)6.71%
Max Revenue beat(4)50.39%
Revenue beat(8)8
Avg Revenue beat(8)19.7%
Revenue beat(12)10
Avg Revenue beat(12)17.42%
Revenue beat(16)12
Avg Revenue beat(16)9.7%
PT rev (1m)4.18%
PT rev (3m)29.5%
EPS NQ rev (1m)10.32%
EPS NQ rev (3m)33.39%
EPS NY rev (1m)0%
EPS NY rev (3m)60.8%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.11%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.09%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE N/A
P/S 1.68
P/FCF 10.75
P/OCF 10.16
P/B 5.97
P/tB 5.97
EV/EBITDA 24.86
EPS(TTM)-1.23
EYN/A
EPS(NY)-0.28
Fwd EYN/A
FCF(TTM)10.8
FCFY9.3%
OCF(TTM)11.43
OCFY9.84%
SpS69.18
BVpS19.46
TBVpS19.46
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -1.4%
ROE -7.45%
ROCE 2.6%
ROIC 2.05%
ROICexc 3.75%
ROICexgc 5.26%
OM 3.7%
PM (TTM) N/A
GM N/A
FCFM 15.61%
ROA(3y)-24.37%
ROA(5y)-26.49%
ROE(3y)-69.99%
ROE(5y)-79.32%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.67
Health
Industry RankSector Rank
Debt/Equity 1
Debt/FCF 1.8
Debt/EBITDA 5.31
Cap/Depr 57.58%
Cap/Sales 0.91%
Interest Coverage 250
Cash Conversion 312.68%
Profit Quality N/A
Current Ratio 0.53
Quick Ratio 0.53
Altman-Z 0.03
F-Score6
WACC9.48%
ROIC/WACC0.22
Cap/Depr(3y)71.75%
Cap/Depr(5y)141.76%
Cap/Sales(3y)2.85%
Cap/Sales(5y)3.47%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)90.33%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%142.72%
EPS Next Y94.61%
EPS Next 2Y40.47%
EPS Next 3Y28.28%
EPS Next 5Y23.08%
Revenue 1Y (TTM)215.11%
Revenue growth 3Y9.47%
Revenue growth 5Y60.07%
Sales Q2Q%165.13%
Revenue Next Year197.48%
Revenue Next 2Y77.97%
Revenue Next 3Y53.97%
Revenue Next 5Y34.9%
EBIT growth 1Y130.67%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year171.97%
EBIT Next 3Y40.71%
EBIT Next 5Y24.71%
FCF growth 1Y175.58%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y185.03%
OCF growth 3YN/A
OCF growth 5YN/A