Root (NASDAQ:ROOT) Issues Quarterly Earnings Results

Root (NASDAQ:ROOT) released its earnings results on Wednesday. The company reported $0.31 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.03 by $0.28, FiscalAI reports. Root had a net margin of 3.80% and a return on equity of 23.36%. The company had revenue of $397.00 million for the quarter, compared to the consensus estimate of $381.57 million. During the same period in the prior year, the company posted $1.30 EPS. The company’s revenue was up 21.5% compared to the same quarter last year.

Here are the key takeaways from Root’s conference call:

• Strong 2025 results and balance sheet — revenue rose 29% and net income 30%, with $1.5B in premiums, full-year net income of $40M and $312M of unencumbered capital, positioning Root to fund growth.
• Partnerships driving growth — partnerships were nearly half of Q4 new writings and are meeting profitability/loss-ratio targets, highlighted by deep integrations with Carvana, VUE (agent workflow), and a Toyota connected-vehicle telematics opt-in for instant quotes.
• AI-driven pricing advantage — management says iterative AI/ML models and vehicle/behavioral data increased LTVs >20% over 12 months, enabling lower average premiums while maintaining loss-ratio performance and improving retention.
• Near-term profitability pressure from investments — Q4 net income fell to $5M and operating income/EBITDA declined due to deliberate partnership and R&D/marketing spend; Root expects higher loss ratios (within a 60–65% target) and lower full-year net income in 2026 as it accelerates acquisition investments.

Root Stock Up 5.7%

Shares of NASDAQ:ROOT traded up $3.28 during trading on Wednesday, hitting $61.09. 627,367 shares of the company were exchanged, compared to its average volume of 322,887. Root has a fifty-two week low of $53.37 and a fifty-two week high of $181.14. The stock has a market cap of $947.51 million, a price-to-earnings ratio of 18.46 and a beta of 2.76. The company has a current ratio of 1.23, a quick ratio of 1.23 and a debt-to-equity ratio of 0.76. The firm has a fifty day moving average price of $67.59 and a two-hundred day moving average price of $79.29.

Wall Street Analyst Weigh In

ROOT has been the topic of a number of recent research reports. Wall Street Zen cut shares of Root from a “hold” rating to a “sell” rating in a research note on Sunday, January 18th. Weiss Ratings reissued a “sell (d+)” rating on shares of Root in a research note on Monday, December 29th. Wells Fargo & Company set a $75.00 price objective on Root and gave the stock an “equal weight” rating in a research note on Tuesday, January 13th. Zacks Research raised Root from a “strong sell” rating to a “hold” rating in a research note on Monday, January 12th. Finally, Keefe, Bruyette & Woods restated an “outperform” rating on shares of Root in a research report on Friday, November 7th. Two investment analysts have rated the stock with a Buy rating, five have given a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Hold” and a consensus target price of $121.60.

Institutional Investors Weigh In On Root

Several hedge funds have recently bought and sold shares of the company. T. Rowe Price Investment Management Inc. increased its position in Root by 8.5% during the fourth quarter. T. Rowe Price Investment Management Inc. now owns 946,632 shares of the company’s stock worth $68,376,000 after buying an additional 74,427 shares during the last quarter. XTX Topco Ltd boosted its stake in shares of Root by 33.3% during the 4th quarter. XTX Topco Ltd now owns 7,002 shares of the company’s stock worth $506,000 after acquiring an additional 1,750 shares during the period. Twinbeech Capital LP acquired a new position in shares of Root during the 4th quarter worth approximately $1,018,000. Millennium Management LLC raised its stake in Root by 780.1% in the 4th quarter. Millennium Management LLC now owns 220,815 shares of the company’s stock valued at $15,949,000 after acquiring an additional 195,725 shares during the period. Finally, Boothbay Fund Management LLC lifted its holdings in Root by 967.8% during the 4th quarter. Boothbay Fund Management LLC now owns 90,784 shares of the company’s stock valued at $6,557,000 after purchasing an additional 82,282 shares during the last quarter. 59.82% of the stock is currently owned by institutional investors and hedge funds.

Root Company Profile

Root, trading on the Nasdaq under the ticker ROOT, is a Columbus, Ohio–based insurance company that leverages mobile technology and data analytics to offer personalized auto insurance policies. Founded in 2015 by Alex Timm and Dan Manges, Root set out to transform traditional underwriting by focusing on individual driving behavior rather than broad demographic factors.

The company’s core product is usage-based auto insurance, delivered through a smartphone app that monitors driving patterns such as speed, braking and phone usage behind the wheel.