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Bull of the Day: Root (ROOT)

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Root (ROOT - Free Report) is a Zack Rank #1 (Strong Buy) that is an insurance company that primarily provides automobile and renters insurance. The company operates with a direct-to-consumer model, meaning they sell policies directly to customers rather than relying on traditional insurance agents.

The stock is surging after a strong earnings beat and upbeat guidance, with analysts boosting estimates.

About the Company

Root is valued at approximately $2 billion and employs over 1,000 people. It was founded in 2015 and headquartered in Columbus, Ohio.

The company distributes their insurance through digital media, independent agents, referrals, and partnerships, expanding beyond just their app and website. Customers can access their services via mobile apps and their website, making the experience more digital-first.

The stock has a Zacks Style Score of “A” in Growth and Momentum. However, ROOT has a “D” rating in Value.  

Q4 Earnings Beat

Root delivered a massive Q4 earnings beat, surprising to the upside by 306%. This was the thirteenth beat in a row, which followed last quarter's 321% beat.

Q4 Revenue surged 67.7% YoY to $326.7 million, exceeding estimates of $291 million. Gross premiums written rose 18%, and policies in force increased 21% YoY.

Most notably, Root posted its second consecutive quarter of profitability, with $31 million in net income for the full year, a $178 million improvement over last year.

Root credited its success to disciplined underwriting and a data-driven, direct-to-consumer model that optimizes loss ratios. The company now boasts one of the best loss ratios in the industry and continues to scale efficiently.

Root, Inc. Price and EPS Surprise

Root, Inc. Price and EPS Surprise

Root, Inc. price-eps-surprise | Root, Inc. Quote

Estimates Headed Higher

There are not a lot of analysts covering the stock yet, but that will likely change soon. Those that are covering ROOT, are lifting their estimates in a big way.

For the current year, estimates have jumped from -$1.77 to -$0.29. Since EPS, the numbers were taken from -$0.72 to -$0.29.

For the next year, analysts see earnings swinging into the black. Over the last 60 days, these numbers have gone from $0.50 to $0.65, a move of 30%.   

After earnings, Wells Fargo analyst Elyse Greenspan maintained Root with a Equal-Weight, but raised the price target from $80 to $97.

The Technical Take

Since early 2024 the bulls have been on a rampage in this name, taking the stock from $7 last February to $145 last week. So far in 2025, the stock has almost doubled.

Despite the recent market weakness, this has been one of the strongest performers out there. While investors might understandably want to chase the performance, the stock could be ripe to buy on any pullback.

Let’s take a look at some levels investors can target:

21-day: $119

50-day: $97.50

200-day: $68

Post EPS Fibonacci buy zone (50%-61.8% retracements): $112-117

Upside Fibonacci targets (161.8% extension): $172

In Summary

Root’s impressive earnings momentum, fueled by disciplined underwriting and a cutting-edge digital model, has positioned it as a rising force in the Insurtech space.

With back-to-back profitable quarters, surging revenue, and analysts raising estimates, the company is proving its ability to scale efficiently while maintaining industry-leading loss ratios.

The stock’s explosive momentum signals strong investor confidence, and with further growth on the horizon, Root remains a compelling opportunity for investors looking for a small cap growth name. 


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