ROOT INC/OH -CLASS A (ROOT) Stock Fundamental Analysis
NASDAQ:ROOT - Nasdaq - US77664L2079 - Common Stock - Currency: USD
Overall ROOT gets a fundamental rating of 3 out of 10. We evaluated ROOT against 143 industry peers in the Insurance industry. While ROOT seems to be doing ok healthwise, there are quite some concerns on its profitability. ROOT is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year ROOT was profitable.
In the past year ROOT had a positive cash flow from operations.
In the past 5 years ROOT reported 4 times negative net income.
ROOT had negative operating cash flow in 4 of the past 5 years.
1.2 Ratios
ROOT has a better Return On Assets (2.95%) than 67.13% of its industry peers.
ROOT has a Return On Equity of 13.71%. This is in the better half of the industry: ROOT outperforms 67.83% of its industry peers.
ROOT has a better Return On Invested Capital (5.29%) than 83.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.95% | ||
| ROE | 13.71% | ||
| ROIC | 5.29% |
ROA(3y)-10.55%
ROA(5y)-18.35%
ROE(3y)-40.11%
ROE(5y)-47.17%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 3.67%, ROOT is doing worse than 69.23% of the companies in the same industry.
ROOT has a Operating Margin (8.06%) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.06% | ||
| PM (TTM) | 3.67% | ||
| 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
2. Health
2.1 Basic Checks
ROOT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ROOT has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ROOT has been increased compared to 5 years ago.
ROOT has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.42, we must say that ROOT is in the distress zone and has some risk of bankruptcy.
ROOT has a Altman-Z score of 0.42. This is in the better half of the industry: ROOT outperforms 72.03% of its industry peers.
The Debt to FCF ratio of ROOT is 1.00, which is an excellent value as it means it would take ROOT, only 1.00 years of fcf income to pay off all of its debts.
ROOT has a Debt to FCF ratio of 1.00. This is in the better half of the industry: ROOT outperforms 67.83% of its industry peers.
ROOT has a Debt/Equity ratio of 0.58. This is a neutral value indicating ROOT is somewhat dependend on debt financing.
ROOT's Debt to Equity ratio of 0.58 is on the low side compared to the rest of the industry. ROOT is outperformed by 72.73% of its industry peers.
Although ROOT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 1 | ||
| Altman-Z | 0.42 |
ROIC/WACC0.56
WACC9.51%
2.3 Liquidity
ROOT has a Current Ratio of 0.37. This is a bad value and indicates that ROOT is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.37, ROOT is in the better half of the industry, outperforming 72.03% of the companies in the same industry.
A Quick Ratio of 0.37 indicates that ROOT may have some problems paying its short term obligations.
The Quick ratio of ROOT (0.37) is better than 72.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.37 | ||
| Quick Ratio | 0.37 |
3. Growth
3.1 Past
ROOT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 141.18%, which is quite impressive.
ROOT shows a strong growth in Revenue. In the last year, the Revenue has grown by 98.66%.
ROOT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 32.31% yearly.
EPS 1Y (TTM)141.18%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%354.76%
Revenue 1Y (TTM)98.66%
Revenue growth 3Y50.46%
Revenue growth 5Y32.31%
Sales Q2Q%37.07%
3.2 Future
The Earnings Per Share is expected to grow by 37.55% on average over the next years. This is a very strong growth
Based on estimates for the next years, ROOT will show a decrease in Revenue. The Revenue will decrease by -8.30% on average per year.
EPS Next Y35.69%
EPS Next 2Y32.79%
EPS Next 3Y37.55%
EPS Next 5YN/A
Revenue Next Year25.13%
Revenue Next 2Y17.88%
Revenue Next 3Y16.37%
Revenue Next 5Y-8.3%
3.3 Evolution
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 36.47 indicates a quite expensive valuation of ROOT.
ROOT's Price/Earnings ratio is a bit more expensive when compared to the industry. ROOT is more expensive than 78.32% of the companies in the same industry.
ROOT's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.82.
With a Price/Forward Earnings ratio of 38.71, ROOT can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ROOT indicates a slightly more expensive valuation: ROOT is more expensive than 79.72% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.21, ROOT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.47 | ||
| Fwd PE | 38.71 |
4.2 Price Multiples
ROOT's Enterprise Value to EBITDA ratio is in line with the industry average.
ROOT's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.13 | ||
| EV/EBITDA | 12.43 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ROOT's earnings are expected to grow with 37.55% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.02
PEG (5Y)N/A
EPS Next 2Y32.79%
EPS Next 3Y37.55%
5. Dividend
5.1 Amount
ROOT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
116.72
-4.31 (-3.56%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners54.63%
Inst Owner Change0.98%
Ins Owners3.69%
Ins Owner Change-0.12%
Market Cap1.79B
Analysts76.67
Price Target147.9 (26.71%)
Short Float %15.87%
Short Ratio4.51
Dividend
| Industry Rank | Sector 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)298.71%
Min EPS beat(2)210.91%
Max EPS beat(2)386.52%
EPS beat(4)4
Avg EPS beat(4)223.67%
Min EPS beat(4)62.56%
Max EPS beat(4)386.52%
EPS beat(8)7
Avg EPS beat(8)128.38%
EPS beat(12)11
Avg EPS beat(12)91.69%
EPS beat(16)14
Avg EPS beat(16)71.39%
Revenue beat(2)2
Avg Revenue beat(2)9.71%
Min Revenue beat(2)9.34%
Max Revenue beat(2)10.07%
Revenue beat(4)4
Avg Revenue beat(4)9%
Min Revenue beat(4)6.71%
Max Revenue beat(4)10.07%
Revenue beat(8)8
Avg Revenue beat(8)20.93%
Revenue beat(12)10
Avg Revenue beat(12)14.03%
Revenue beat(16)14
Avg Revenue beat(16)18.7%
PT rev (1m)-6.15%
PT rev (3m)23.72%
EPS NQ rev (1m)153.96%
EPS NQ rev (3m)410.39%
EPS NY rev (1m)77.17%
EPS NY rev (3m)671.56%
Revenue NQ rev (1m)1.88%
Revenue NQ rev (3m)9.83%
Revenue NY rev (1m)0.91%
Revenue NY rev (3m)9.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.47 | ||
| Fwd PE | 38.71 | ||
| P/S | 1.41 | ||
| P/FCF | 9.13 | ||
| P/OCF | 8.62 | ||
| P/B | 5.27 | ||
| P/tB | 5.27 | ||
| EV/EBITDA | 12.43 |
EPS(TTM)3.2
EY2.74%
EPS(NY)3.02
Fwd EY2.58%
FCF(TTM)12.78
FCFY10.95%
OCF(TTM)13.53
OCFY11.59%
SpS82.69
BVpS22.17
TBVpS22.17
PEG (NY)1.02
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.95% | ||
| ROE | 13.71% | ||
| ROCE | 6.7% | ||
| ROIC | 5.29% | ||
| ROICexc | 8.8% | ||
| ROICexgc | 11.77% | ||
| OM | 8.06% | ||
| PM (TTM) | 3.67% | ||
| GM | N/A | ||
| FCFM | 15.46% |
ROA(3y)-10.55%
ROA(5y)-18.35%
ROE(3y)-40.11%
ROE(5y)-47.17%
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-Score7
Asset Turnover0.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 1 | ||
| Debt/EBITDA | 1.69 | ||
| Cap/Depr | 82.14% | ||
| Cap/Sales | 0.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 178.69% | ||
| Profit Quality | 420.77% | ||
| Current Ratio | 0.37 | ||
| Quick Ratio | 0.37 | ||
| Altman-Z | 0.42 |
F-Score7
WACC9.51%
ROIC/WACC0.56
Cap/Depr(3y)75.66%
Cap/Depr(5y)79.53%
Cap/Sales(3y)2.11%
Cap/Sales(5y)2.84%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)141.18%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%354.76%
EPS Next Y35.69%
EPS Next 2Y32.79%
EPS Next 3Y37.55%
EPS Next 5YN/A
Revenue 1Y (TTM)98.66%
Revenue growth 3Y50.46%
Revenue growth 5Y32.31%
Sales Q2Q%37.07%
Revenue Next Year25.13%
Revenue Next 2Y17.88%
Revenue Next 3Y16.37%
Revenue Next 5Y-8.3%
EBIT growth 1Y269.54%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year111.35%
EBIT Next 3Y45.31%
EBIT Next 5Y37.65%
FCF growth 1Y178.07%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y185.56%
OCF growth 3YN/A
OCF growth 5YN/A