Evaluating ROOT INC/OH -CLASS A (NASDAQ:ROOT) using Mark Minervini’s winning stock formula

Our stock screener has spotted ROOT INC/OH -CLASS A (NASDAQ:ROOT) as a stocks which checks several boxes as specified by Mark Minervini. We will dive into an analysis below.

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)

Unpacking ROOT's High Growth Momentum Rating

Every stock receives a High Growth Momentum Rating (HGM) from ChartMill, ranging from 0 to 10. This rating assesses various growth and profitability aspects, including historical and projected EPS and revenue growth. ROOT boasts a 7 out of 10:

Earnings Momentum

• With a favorable trend in its quarter-to-quarter (Q2Q) earnings per share (EPS), ROOT highlights its ability to generate increasing profitability, showcasing a 179.0% growth.
• The earnings per share (EPS) growth of ROOT is accelerating: the current Q2Q growth of 179.0% is above the previous quarter Q2Q growth of 143.0%. Earnings momentum and acceleration are key for high growth systems.
• EPS growth accelerated for 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 consistent quarter-to-quarter (Q2Q) revenue growth of 67.71%, ROOT exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for continued growth.
• 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.
• The average next Quarter EPS Estimate for ROOT has experienced a 742.0% change in the last 3 months, reflecting evolving expectations by analysts regarding the company's EPS performance.
• ROOT has a strong history of beating EPS estimates in the last 4 quarters, signaling its ability to consistently exceed market expectations. This indicates the company's strong financial performance and its potential for creating shareholder value.

Financial Strength & Profitability

• The operating margin of ROOT has seen steady growth over the past year, signaling improved profitability. This trend indicates the company's effective cost management and its ability to generate higher returns.
• ROOT has shown positive growth in its free cash flow (FCF) over the past year, indicating improved cash generation and financial strength. This growth highlights the company's ability to effectively manage its cash flows and generate surplus funds.
• A Debt/Equity ratio of 0.62 indicates that ROOT is leveraging debt effectively without excessive risk.

Market Strength & Institutional Confidence

• ROOT demonstrates a balanced ownership structure, with institutional shareholders at 68.53%. This indicates a diverse investor base, which can contribute to price stability and potential future growth.
• ROOT has maintained a healthy Relative Strength (RS) over the analyzed period, with a current 98.61 rating. This demonstrates the stock's ability to outperform its peers and indicates its competitive positioning.

Why is ROOT a setup?

The Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For ROOT this score is currently 3:

Although ROOT has an excellent technical rating, it does not offer a high quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Our latest full technical report of ROOT contains the most current technical analsysis.

Final Thoughts

More ideas for high growth momentum stocks can be found on ChartMill in our High Growth Momentum + Trend Template screen.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.