Root Inc's stock, priced at $30.87 per share, seems overvalued given its modest future outlook. With a three-month investment horizon, it carries a bit of risk. The company's Sharpe Ratio stands at 0.083, indicating a 0.083% return per unit of risk over the past three months. By examining Root's technical indicators, you can assess whether the anticipated return of 0.82% aligns with the associated risk. Consider Root's Semi Deviation of 4.24, its risk-adjusted performance of 0.0631, and a Coefficient of Variation of 1373.25 to determine if these risk assessments meet your expectations.
Main Takeaways
Root Inc might catch your eye with its market capitalization standing at a solid
1.1B, but potential investors should also weigh the high probability of bankruptcy, which is concerning at
77.13%.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Root income statement, its balance sheet, and the statement of cash flows. Potential Root investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Root investors may use each financial statement separately, they are all related. The changes in Root's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Root's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Root
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Root performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Root shares is the value that is considered the true value of the share. If
the intrinsic value of Root is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Root. Please read more on our
fundamental analysis page.
How effective is Root in utilizing its assets?
Root Inc reports assets on its Balance Sheet. It represents the amount of Root resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Root aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Property & Casualty Insurance space. To get a better handle on how balance sheet or income statements item affect Root volatility, please check the breakdown of all its
fundamentals.
Are Root Earnings Expected to grow?
The
future earnings power of Root involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Root factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Root
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Root
expected earnings.
Root Gross Profit
Root Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Root previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Root Gross Profit growth over the last 10 years. Please check Root's
gross profit and other
fundamental indicators for more details.
A Deeper look at Root
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Root is not uncomon. There are few distinct groups of Root stakehholders that the SEC considers insiders. Investors usually gain information through their work as corporate directors, officers, or employees. If these individuals share the information with a friend, family, or business partner and the person who receives the information exchanges stock in the company, he or shie is also an insider. Let's take a look at how the ownership of Root is distributed among investors.
Ownership Allocation
The
market capitalization of Root Inc is $1.07 Billion. Over half of Root's outstanding shares are owned by
third-party entities. These third-party entities are typically referred to as corporate investors that secure positions in a given instrument to benefit from reduced trade commissions. Note, that even with negative
profits, if the true value of the company is larger than the current market value, you may still be able to generate positive returns on investment in this company.
| Retail Investors25.23% | Insiders12.93% | Institutions61.84% |
| Retail Investors | 25.23 |
| Insiders | 12.93 |
| Institutions | 61.84 |
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence Root's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over Root's decisions due to their larger holdings.
| 2021 | 2022 | 2023 | 2024 (projected) |
Depreciation And Amortization | 8.3M | 7.1M | 7.8M | 6.3M | Interest Income | 3.5M | 8.1M | 32.8M | 34.4M |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Root has an asset utilization ratio of 38.75 percent. This implies that the Company is making $0.39 for each dollar of assets. An increasing asset utilization means that Root Inc is more efficient with each dollar of assets it utilizes for everyday operations.
| | | | Other Current Assets832.4 M | Total Current Assets992.6 M | |
| Net Tangible Assets | 344.98 Million | 12.15 |
| Non Current Assets Total | 163.07 Million | 5.74 |
| Non Currrent Assets Other | 220.92 Million | 7.78 |
| Other Assets | 263.24 Million | 9.27 |
| Other Current Assets | 832.44 Million | 29.31 |
| Total Current Assets | 992.62 Million | 34.95 |
| Intangible Assets | 22.53 Million | 0.79 |
Warren Buffett once said, "Price is what you pay; value is what you get." Root Inc., trading on NASDAQ, might just offer that value for discerning investors. With a robust current ratio of 3.92x, the company demonstrates a strong ability to cover its short-term liabilities, which total $224.2 million. Despite reporting a net income loss of $147.4 million, Root Inc. maintains a significant cash reserve of $886.1 million, providing a cushion to navigate its financial challenges. Additionally, with 61.84% of shares owned by institutions, there is a notable level of confidence from large investors, suggesting potential for future growth.
Root is likely to close below $72 next week
Root Inc's stock is experiencing increased volatility, with its recent downside deviation surpassing 4.49. This suggests potential downward pressure in the near future, possibly pushing the stock below $72 next week. Investors should monitor market trends and any company-specific developments that could affect its path. Root Inc's volatility is above average for the chosen time frame. Understanding these trends can help investors make timely decisions. By using volatility indicators, traders can assess Root's stock risk compared to market fluctuations during both rising and falling markets.
Bear markets, with their higher volatility, can significantly impact Root's stock price, causing stress for investors as they see their shares' value drop. This often leads investors to adjust their portfolios by acquiring different assets as prices decline.Considering the current landscape for Root Inc, it's essential to weigh both the potential rewards and risks before making an investment decision. The stock's market value stands at
70.96, which is significantly higher than its real value of
30.87, suggesting that the market might be overestimating its worth. While there is a possible upside price of 95.06, the downside risk is also notable at 75.23. Analysts have a mixed outlook, with a consensus leaning towards a "Buy," supported by 2 strong buy recommendations. However, the projected EPS for the next year is -1.79, indicating ongoing financial challenges. Ultimately, if you're considering investing in Root, it's crucial to balance these factors and determine if the potential upside aligns with your risk tolerance and investment strategy..
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Nico Santiago is a PR Contributor to Macroaxis Editorial Board. Nico is a relatively new author here at Macroaxis and he likes to work on advertising and sponsored content and marketing for the company. Nico spends most of his time surfing when the weather is nice and he spends the rest of the year writing for various blogs and companies, as he works on his upcoming books, The Rise of the Financial Machines and Time Series Modelling with AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nico Santiago do not own shares of Root Inc. Please refer to our
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