Root (NASDAQ:ROOT) Shares Gap Down – Should You Sell?

Shares of Root, Inc. (NASDAQ:ROOT) gapped down before the market opened on Thursday . The stock had previously closed at $88.82, but opened at $79.84. Root shares last traded at $77.2050, with a volume of 510,226 shares changing hands.

Wall Street Analyst Weigh In

ROOT has been the subject of a number of research reports. Jefferies Financial Group reduced their target price on shares of Root from $172.00 to $138.00 and set a “buy” rating for the company in a report on Monday, August 11th. Zacks Research cut shares of Root from a “hold” rating to a “strong sell” rating in a report on Tuesday, October 7th. Wall Street Zen downgraded shares of Root from a “buy” rating to a “hold” rating in a research report on Saturday, August 2nd. Weiss Ratings reissued a “hold (c)” rating on shares of Root in a report on Wednesday, October 8th. Finally, Wells Fargo & Company lifted their price objective on shares of Root from $89.00 to $96.00 and gave the company an “equal weight” rating in a research report on Thursday. Two research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, the company has a consensus rating of “Hold” and a consensus target price of $125.80.

Root Price Performance

The firm has a market capitalization of $1.24 billion, a P/E ratio of 16.03 and a beta of 2.21. The company has a current ratio of 1.26, a quick ratio of 1.26 and a debt-to-equity ratio of 0.82. The firm has a 50 day moving average price of $87.96 and a 200-day moving average price of $112.65.

Root (NASDAQ:ROOT) last released its earnings results on Wednesday, November 5th. The company reported ($0.35) EPS for the quarter, beating analysts’ consensus estimates of ($0.43) by $0.08. Root had a return on equity of 38.24% and a net margin of 6.02%.The firm had revenue of $387.80 million for the quarter, compared to analysts’ expectations of $363.06 million. During the same quarter in the prior year, the firm posted $1.35 earnings per share. The company’s quarterly revenue was up 26.9% on a year-over-year basis. On average, analysts expect that Root, Inc. will post -0.08 earnings per share for the current year.

Insider Buying and Selling

In other Root news, insider Mahtiyar Bonakdarpour sold 5,750 shares of Root stock in a transaction on Tuesday, September 2nd. The stock was sold at an average price of $89.74, for a total transaction of $516,005.00. Following the completion of the sale, the insider directly owned 274,226 shares of the company’s stock, valued at $24,609,041.24. The trade was a 2.05% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CEO Alexander E. Timm sold 10,861 shares of Root stock in a transaction on Tuesday, September 2nd. The shares were sold at an average price of $88.88, for a total value of $965,325.68. Following the sale, the chief executive officer directly owned 157,748 shares of the company’s stock, valued at approximately $14,020,642.24. This trade represents a 6.44% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 11.76% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of the company. Twin Tree Management LP acquired a new stake in shares of Root during the 1st quarter worth approximately $37,000. KBC Group NV purchased a new stake in shares of Root during the 1st quarter worth about $48,000. State of Alaska Department of Revenue purchased a new position in shares of Root in the 3rd quarter valued at about $50,000. Russell Investments Group Ltd. raised its holdings 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. Finally, Ameritas Investment Partners Inc. boosted its position in Root by 28.5% during the second quarter. Ameritas Investment Partners Inc. now owns 1,087 shares of the company’s stock worth $139,000 after purchasing an additional 241 shares in the last quarter. 59.82% of the stock is owned by institutional investors and hedge funds.

Root Company Profile

Root, Inc provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies.