70.48 USD
+1.57 (+2.28%)
Taking everything into account, ROOT scores 3 out of 10 in our fundamental rating. ROOT was compared to 148 industry peers in the Insurance industry. ROOT scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. While showing a medium growth rate, ROOT is valued expensive at the moment.
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
- Looking at the Return On Assets, with a value of 3.28%, ROOT is in the better half of the industry, outperforming 67.57% of the companies in the same industry.
- The Return On Equity of ROOT (14.30%) is better than 67.57% of its industry peers.
- ROOT has a Return On Invested Capital of 4.32%. This is in the better half of the industry: ROOT outperforms 72.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.28% | ||
| ROE | 14.3% | ||
| ROIC | 4.32% |
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 3.73%, ROOT is doing worse than 71.62% of the companies in the same industry.
- ROOT has a Operating Margin of 5.97%. This is in the lower half of the industry: ROOT underperforms 70.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.97% | ||
| PM (TTM) | 3.73% | ||
| 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.
- ROOT has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, ROOT has an improved debt to assets ratio.
2.2 Solvency
- ROOT has an Altman-Z score of 0.12. This is a bad value and indicates that ROOT is not financially healthy and even has some risk of bankruptcy.
- ROOT has a better Altman-Z score (0.12) than 68.92% of its industry peers.
- ROOT has a debt to FCF ratio of 1.03. This is a very positive value and a sign of high solvency as it would only need 1.03 years to pay back of all of its debts.
- The Debt to FCF ratio of ROOT (1.03) is better than 69.59% of its industry peers.
- ROOT has a Debt/Equity ratio of 0.52. This is a neutral value indicating ROOT is somewhat dependend on debt financing.
- ROOT has a Debt to Equity ratio of 0.52. This is in the lower half of the industry: ROOT underperforms 72.97% 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 | 0.52 | ||
| Debt/FCF | 1.03 | ||
| Altman-Z | 0.12 |
ROIC/WACC0.44
WACC9.87%
2.3 Liquidity
- A Current Ratio of 0.19 indicates that ROOT may have some problems paying its short term obligations.
- ROOT has a Current ratio of 0.19. This is in the better half of the industry: ROOT outperforms 68.92% of its industry peers.
- A Quick Ratio of 0.19 indicates that ROOT may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.19, ROOT is in the better half of the industry, outperforming 68.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.19 | ||
| Quick Ratio | 0.19 |
3. Growth
3.1 Past
- ROOT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 369.11%, which is quite impressive.
- Looking at the last year, ROOT shows a very strong growth in Revenue. The Revenue has grown by 38.50%.
- The Revenue has been growing by 32.31% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)369.11%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-125.93%
Revenue 1Y (TTM)38.5%
Revenue growth 3Y50.46%
Revenue growth 5Y32.31%
Sales Q2Q%26.86%
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 26.15% on average per year.
- 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 Y1.69%
EPS Next 2Y13.94%
EPS Next 3Y26.15%
EPS Next 5YN/A
Revenue Next Year32.04%
Revenue Next 2Y18.24%
Revenue Next 3Y15.47%
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
- ROOT is valuated rather expensively with a Price/Earnings ratio of 21.29.
- 70.27% of the companies in the same industry are cheaper than ROOT, based on the Price/Earnings ratio.
- ROOT's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- Based on the Price/Forward Earnings ratio of 31.75, the valuation of ROOT can be described as expensive.
- Based on the Price/Forward Earnings ratio, ROOT is valued a bit more expensive than 77.03% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. ROOT is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.29 | ||
| Fwd PE | 31.75 |
4.2 Price Multiples
- 68.24% of the companies in the same industry are more expensive than ROOT, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, ROOT is valued a bit cheaper than the industry average as 68.92% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.71 | ||
| EV/EBITDA | 6.25 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- A more expensive valuation may be justified as ROOT's earnings are expected to grow with 26.15% in the coming years.
PEG (NY)12.6
PEG (5Y)N/A
EPS Next 2Y13.94%
EPS Next 3Y26.15%
5. Dividend
5.1 Amount
- ROOT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ROOT INC/OH -CLASS A / ROOT FAQ
What is the fundamental rating for ROOT stock?
ChartMill assigns a fundamental rating of 3 / 10 to ROOT.
What is the valuation status of ROOT INC/OH -CLASS A (ROOT) stock?
ChartMill assigns a valuation rating of 3 / 10 to ROOT INC/OH -CLASS A (ROOT). This can be considered as Overvalued.
How profitable is ROOT INC/OH -CLASS A (ROOT) stock?
ROOT INC/OH -CLASS A (ROOT) has a profitability rating of 2 / 10.
What is the expected EPS growth for ROOT INC/OH -CLASS A (ROOT) stock?
The Earnings per Share (EPS) of ROOT INC/OH -CLASS A (ROOT) is expected to grow by 1.69% in the next year.