Strength Seen in Root, Inc. (ROOT): Can Its 19.9% Jump Turn into More Strength?
Root, Inc. (ROOT) shares ended the last trading session 19.9% higher at $7.34. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 32.2% gain over the past four weeks.
Better pricing, prudent underwriting, judicious marketing spend, refining fee schedule, and solid renewals well poise Root for growth.
With workforce reduction and rightsizing non-headcount expenses, ROOT estimates to lower run rate expenses by about $50 million annually. The insurer stays focused to Improve loss ratio and expenses to lower operating losses.
In its efforts to be profitable and cerate long term value to shareholders, Root intends to direct its capital spend in areas that would fetch immediate returns.
This company is expected to post quarterly loss of $4.29 per share in its upcoming report, which represents a year-over-year change of +45.8%. Revenues are expected to be $71.5 million, down 23.3% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Root, Inc., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ROOT going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Root, Inc. is a member of the Zacks Insurance - Property and Casualty industry. One other stock in the same industry, Heritage Insurance (HRTG), finished the last trading session 2.3% lower at $2.58. HRTG has returned 42.7% over the past month.
For Heritage Insurance , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.20. This represents a change of -148.8% from what the company reported a year ago. Heritage Insurance currently has a Zacks Rank of #3 (Hold).
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Root, Inc. (ROOT) : Free Stock Analysis Report
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