Root, Inc.
Root, Inc. Fundamental Analysis
Root, Inc. (ROOT) shows moderate financial fundamentals with a PE ratio of 16.25, profit margin of 3.95%, and ROE of 24.25%. The company generates $1.3B in annual revenue with weak year-over-year growth of 1.59%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.4/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ROOT's fundamental strength across five key dimensions:
Efficiency Score
WeakROOT struggles to generate sufficient returns from assets.
Valuation Score
ExcellentROOT trades at attractive valuation levels.
Growth Score
WeakROOT faces weak or negative growth trends.
Financial Health Score
ModerateROOT shows balanced financial health with some risks.
Profitability Score
ModerateROOT maintains healthy but balanced margins.
Key Financial Metrics
Is ROOT Expensive or Cheap?
P/E Ratio
ROOT trades at 16.25 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ROOT's PEG of -0.48 indicates potential undervaluation.
Price to Book
The market values Root, Inc. at 3.50 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 13.85 times EBITDA. This signals the market has high growth expectations.
How Well Does ROOT Make Money?
Net Profit Margin
For every $100 in sales, Root, Inc. keeps $3.95 as profit after all expenses.
Operating Margin
Core operations generate 3.97 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $24.25 in profit for every $100 of shareholder equity.
ROA
Root, Inc. generates $3.48 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Root, Inc. produces operating cash flow of $182.94M, showing steady but balanced cash generation.
Free Cash Flow
Root, Inc. generates strong free cash flow of $173.78M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.68 in free cash annually.
FCF Yield
ROOT converts 23.58% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.25
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.48
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.50
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.57
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.76
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.24
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How ROOT Stacks Against Its Sector Peers
| Metric | ROOT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.25 | 18.86 | Better (Cheaper) |
| ROE | 24.25% | 847.00% | Weak |
| Net Margin | 3.95% | 4202.00% | Weak |
| Debt/Equity | 0.76 | 0.91 | Neutral |
| Current Ratio | 0.00 | 667.17 | Weak Liquidity |
| ROA | 3.48% | -21543.00% (disorted) | Weak |
ROOT outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Root, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
283.15%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
110.34%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
245.40%
Industry Style: Value, Dividend, Cyclical
High Growth