ROOTS CORP (ROOT.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:ROOT - CA7766521099 - Common Stock
3.25 CAD
+0.02 (+0.62%)
We assign a fundamental rating of 4 out of 10 to ROOT. ROOT was compared to 19 industry peers in the Specialty Retail industry. There are concerns on the financial health of ROOT while its profitability can be described as average. ROOT is valued quite cheap, while showing a decent growth score. This is a good combination!
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.
- ROOT had positive earnings in 4 of the past 5 years.
- In the past 5 years ROOT always reported a positive cash flow from operatings.
1.2 Ratios
- ROOT's Return On Assets of -9.97% is on the low side compared to the rest of the industry. ROOT is outperformed by 89.47% of its industry peers.
- Looking at the Return On Equity, with a value of -22.04%, ROOT is doing worse than 89.47% of the companies in the same industry.
- With a Return On Invested Capital value of 4.28%, ROOT perfoms like the industry average, outperforming 42.11% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for ROOT is significantly below the industry average of 11.04%.
- The last Return On Invested Capital (4.28%) for ROOT is above the 3 year average (3.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -9.97% | ||
| ROE | -22.04% | ||
| ROIC | 4.28% |
ROA(3y)-2.65%
ROA(5y)0.24%
ROE(3y)-5.48%
ROE(5y)0.76%
ROIC(3y)3.51%
ROIC(5y)5.08%
1.3 Margins
- ROOT's Operating Margin of 5.72% is in line compared to the rest of the industry. ROOT outperforms 52.63% of its industry peers.
- ROOT's Operating Margin has improved in the last couple of years.
- ROOT has a better Gross Margin (61.09%) than 94.74% of its industry peers.
- In the last couple of years the Gross Margin of ROOT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.72% | ||
| PM (TTM) | N/A | ||
| GM | 61.09% |
OM growth 3Y-29.72%
OM growth 5Y5.63%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.15%
GM growth 5Y2.18%
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 more shares outstanding
- Compared to 5 years ago, ROOT has less shares outstanding
- The debt/assets ratio for ROOT is higher compared to a year ago.
2.2 Solvency
- ROOT has an Altman-Z score of 1.37. This is a bad value and indicates that ROOT is not financially healthy and even has some risk of bankruptcy.
- ROOT has a worse Altman-Z score (1.37) than 63.16% of its industry peers.
- ROOT has a debt to FCF ratio of 5.44. This is a neutral value as ROOT would need 5.44 years to pay back of all of its debts.
- With a Debt to FCF ratio value of 5.44, ROOT perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
- A Debt/Equity ratio of 0.68 indicates that ROOT is somewhat dependend on debt financing.
- The Debt to Equity ratio of ROOT (0.68) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 5.44 | ||
| Altman-Z | 1.37 |
ROIC/WACC0.59
WACC7.31%
2.3 Liquidity
- ROOT has a Current Ratio of 1.41. This is a normal value and indicates that ROOT is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of ROOT (1.41) is comparable to the rest of the industry.
- ROOT has a Quick Ratio of 1.41. This is a bad value and indicates that ROOT is not financially healthy enough and could expect problems in meeting its short term obligations.
- ROOT has a Quick ratio of 0.39. This is in the lower half of the industry: ROOT underperforms 78.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.41 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 100.00% over the past year.
- The Earnings Per Share has been growing by 12.20% on average over the past years. This is quite good.
- ROOT shows a small growth in Revenue. In the last year, the Revenue has grown by 4.87%.
- Measured over the past years, ROOT shows a decrease in Revenue. The Revenue has been decreasing by -4.44% on average per year.
EPS 1Y (TTM)100%
EPS 3Y-37%
EPS 5Y12.2%
EPS Q2Q%14.29%
Revenue 1Y (TTM)4.87%
Revenue growth 3Y-1.34%
Revenue growth 5Y-4.44%
Sales Q2Q%6.82%
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 31.90% on average per year.
- The Revenue is expected to grow by 3.86% on average over the next years.
EPS Next Y33.87%
EPS Next 2Y45.04%
EPS Next 3Y31.9%
EPS Next 5YN/A
Revenue Next Year6.52%
Revenue Next 2Y4.53%
Revenue Next 3Y3.86%
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 20.31, the valuation of ROOT can be described as rather expensive.
- Based on the Price/Earnings ratio, ROOT is valued a bit cheaper than the industry average as 68.42% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 27.30. ROOT is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 9.66 indicates a reasonable valuation of ROOT.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ROOT indicates a rather cheap valuation: ROOT is cheaper than 84.21% of the companies listed in the same industry.
- ROOT is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.31 | ||
| Fwd PE | 9.66 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ROOT indicates a somewhat cheap valuation: ROOT is cheaper than 68.42% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, ROOT is valued a bit cheaper than the industry average as 68.42% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.68 | ||
| EV/EBITDA | 5.49 |
4.3 Compensation for Growth
- The 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 31.90% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.6
PEG (5Y)1.67
EPS Next 2Y45.04%
EPS Next 3Y31.9%
5. Dividend
5.1 Amount
- No dividends for ROOT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ROOTS CORP / ROOT.CA FAQ
What is the fundamental rating for ROOT stock?
ChartMill assigns a fundamental rating of 4 / 10 to ROOT.CA.
What is the valuation status of ROOTS CORP (ROOT.CA) stock?
ChartMill assigns a valuation rating of 7 / 10 to ROOTS CORP (ROOT.CA). This can be considered as Undervalued.
How profitable is ROOTS CORP (ROOT.CA) stock?
ROOTS CORP (ROOT.CA) has a profitability rating of 5 / 10.
What is the expected EPS growth for ROOTS CORP (ROOT.CA) stock?
The Earnings per Share (EPS) of ROOTS CORP (ROOT.CA) is expected to grow by 33.87% in the next year.