Is ROOT INC/OH -CLASS A (NASDAQ:ROOT) a Minervini-style stock?

In this article we will dive into ROOT INC/OH -CLASS A (NASDAQ:ROOT) as a possible candidate for growth investing. Investors should always do their own research, but we noticed ROOT INC/OH -CLASS A showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

Does ROOT pass the Minervini Trend Template check?

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for ROOT:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Understanding ROOT's High Growth Momentum Score

ChartMill assigns a High Growth Momentum Rating (HGM) to every stock. This score ranges from 0 to 10 and evaluates the different growth and profitability aspects, including accelleration, surprises and revisions. ROOT scores a 7 out of 10:

Earnings Momentum

• The quarterly earnings of ROOT have shown a 179.0% increase compared to the previous quarter, as revealed in the recent financial report. This growth signifies positive momentum in the company's financials, pointing towards a promising upward trend
• Accelerating EPS growth for ROOT: the current Q2Q growth of 179.0% exceeds the previous quarter Q2Q growth of 143.0%.
• EPS acceleration happened 2 quarters in a row.
• ROOT has experienced 117.0% growth in EPS over a 12 month period, demonstrating its ability to generate sustained and positive earnings momentum.
• With impressive quarter-to-quarter (Q2Q) revenue growth of 67.71%, ROOT showcases its ability to generate increased sales and revenue. This growth indicates the company's strong customer demand and its effective business strategies.
• With notable 1-year revenue growth of 159.0%, ROOT exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for future growth.
• ROOT has seen a 742.0% change in the average next Quarter EPS Estimate by analysts over the last 3 months, signaling the shifting perception of the company's EPS outlook.
• With a track record of beating EPS estimates in the last 4 quarters, ROOT showcases its consistent ability to deliver earnings surprises. This reflects the company's strong execution and its competitive position in the market.

Financial Strength & Profitability

• With positive growth in its operating margin over the past year, ROOT showcases its ability to improve profitability through effective cost control and operational efficiency. This growth underscores the company's commitment to enhancing its financial performance.
• ROOT has experienced notable growth in its free cash flow (FCF) over the past year, signaling improved cash generation and strong financial performance. This growth suggests the company's ability to generate excess cash for reinvestment or shareholder returns.
• With a Debt/Equity ratio of 0.62, ROOT demonstrates prudent financial management.

Institutional Confidence & Market Strength

• The ownership composition of ROOT reflects a balanced investor ecosystem, with institutional shareholders owning 68.53%. This indicates a broader market participation and potential for increased trading liquidity.
• The Relative Strength (RS) of ROOT has consistently been strong, with a current 98.89 rating. This indicates the stock's ability to exhibit relative price outperformance and reflects its competitive strength.

How do we evaluate the setup for ROOT?

ChartMill also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, ROOT exhibits a 6 setup rating, indicating its consolidation status in recent days and weeks.

Besides having an excellent technical rating, ROOT also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price. Another positive sign is the recent Pocket Pivot signal.

For an up to date full technical analysis you can check the technical report of ROOT

Concluding

It looks like ROOT INC/OH -CLASS A meets the Minervini criteria. More high growth momentum breakout stocks can be found in our High Growth Momentum + Trend Template screen.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.