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Root, Inc. (ROOT) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Root, Inc. (ROOT - Free Report) ? Shares have been on the move with the stock up 75.1% over the past month. The stock hit a new 52-week high of $118.15 in the previous session. Root, Inc. has gained 552.6% since the start of the year compared to the 18.6% move for the Zacks Finance sector and the 25.6% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 30, 2024, Root reported EPS of $1.35 versus consensus estimate of $-0.61 while it beat the consensus revenue estimate by 20.35%.
For the current fiscal year, Root is expected to post earnings of -$2.13 per share on $1.06 billion in revenues. This represents a 79.2% change in EPS on a 133.85% change in revenues. For the next fiscal year, the company is expected to earn -$1.16 per share on $1.2 billion in revenues. This represents a year-over-year change of 45.54% and 12.69%, respectively.
Valuation Metrics
Root may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Root has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Root currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Root passes the test. Thus, it seems as though Root shares could have potential in the weeks and months to come.
How Does ROOT Stack Up to the Competition?
Shares of ROOT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Skyward Specialty Insurance Group, Inc. (SKWD - Free Report) . SKWD has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Skyward Specialty Insurance Group, Inc. beat our consensus estimate by 10.94%, and for the current fiscal year, SKWD is expected to post earnings of $3.32 per share on revenue of $1.14 billion.
Shares of Skyward Specialty Insurance Group, Inc. have gained 5.3% over the past month, and currently trade at a forward P/E of 14.81X and a P/CF of 19.66X.
The Insurance - Property and Casualty industry is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ROOT and SKWD, even beyond their own solid fundamental situation.
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Root, Inc. (ROOT) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Root, Inc. (ROOT - Free Report) ? Shares have been on the move with the stock up 75.1% over the past month. The stock hit a new 52-week high of $118.15 in the previous session. Root, Inc. has gained 552.6% since the start of the year compared to the 18.6% move for the Zacks Finance sector and the 25.6% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 30, 2024, Root reported EPS of $1.35 versus consensus estimate of $-0.61 while it beat the consensus revenue estimate by 20.35%.
For the current fiscal year, Root is expected to post earnings of -$2.13 per share on $1.06 billion in revenues. This represents a 79.2% change in EPS on a 133.85% change in revenues. For the next fiscal year, the company is expected to earn -$1.16 per share on $1.2 billion in revenues. This represents a year-over-year change of 45.54% and 12.69%, respectively.
Valuation Metrics
Root may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Root has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Root currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Root passes the test. Thus, it seems as though Root shares could have potential in the weeks and months to come.
How Does ROOT Stack Up to the Competition?
Shares of ROOT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Skyward Specialty Insurance Group, Inc. (SKWD - Free Report) . SKWD has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Skyward Specialty Insurance Group, Inc. beat our consensus estimate by 10.94%, and for the current fiscal year, SKWD is expected to post earnings of $3.32 per share on revenue of $1.14 billion.
Shares of Skyward Specialty Insurance Group, Inc. have gained 5.3% over the past month, and currently trade at a forward P/E of 14.81X and a P/CF of 19.66X.
The Insurance - Property and Casualty industry is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ROOT and SKWD, even beyond their own solid fundamental situation.