Root (NASDAQ:ROOT) Issues Quarterly Earnings Results, Beats Expectations By $0.28 EPS

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

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 Trading Down 5.8%

NASDAQ ROOT traded down $3.56 on Thursday, hitting $57.53. 256,103 shares of the company were exchanged, compared to its average volume of 305,700. The company has a debt-to-equity ratio of 0.76, a current ratio of 1.23 and a quick ratio of 1.23. Root has a twelve month low of $53.37 and a twelve month high of $181.14. The firm has a market capitalization of $892.29 million, a P/E ratio of 17.33 and a beta of 2.76. The company’s 50 day moving average price is $67.59 and its 200-day moving average price is $79.29.

Institutional Investors Weigh In On Root

Large investors have recently made changes to their positions in the company. Russell Investments Group Ltd. boosted its stake in Root by 511.7% in the 2nd quarter. Russell Investments Group Ltd. now owns 734 shares of the company’s stock worth $94,000 after purchasing an additional 614 shares during the period. Tower Research Capital LLC TRC lifted its holdings in shares of Root by 237.2% in the second quarter. Tower Research Capital LLC TRC now owns 1,278 shares of the company’s stock valued at $164,000 after purchasing an additional 899 shares in the last quarter. Advisory Services Network LLC purchased a new stake in shares of Root in the third quarter valued at $144,000. State of Wyoming acquired a new stake in shares of Root in the second quarter worth $213,000. Finally, Osaic Holdings Inc. grew its holdings in shares of Root by 67.5% during the second quarter. Osaic Holdings Inc. now owns 2,024 shares of the company’s stock valued at $259,000 after buying an additional 816 shares in the last quarter. Institutional investors and hedge funds own 59.82% of the company’s stock.

Analyst Ratings Changes

Several analysts have recently weighed in on ROOT shares. Zacks Research upgraded Root from a “strong sell” rating to a “hold” rating in a report on Monday, January 12th. Keefe, Bruyette & Woods reissued an “outperform” rating and issued a $104.00 price target (down from $150.00) on shares of Root in a report on Thursday. Weiss Ratings reaffirmed a “sell (d+)” rating on shares of Root in a research note on Monday, December 29th. Wall Street Zen downgraded shares of Root from a “hold” rating to a “sell” rating in a report on Sunday, January 18th. Finally, Wells Fargo & Company set a $75.00 target price on shares of Root and gave the company an “equal weight” rating in a research note on Tuesday, January 13th. Two research analysts have rated the stock with a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company has an average rating of “Hold” and a consensus price target of $109.40.

About Root

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.