ROOT - Root stock up 300% in ten days is not out of juice yet: Jefferies

2024-03-01 10:03:17 ET

Root Inc (NASDAQ: ROOT) has close to quadrupled over the past ten days but a Jefferies analyst is confident the stock could still push further to the upside.

Root stock could hit $40 later this year

Yaron Kinar upgraded the online car insurance company to “buy” this morning and raised his price target to $40 that suggests another 25% upside from here.

He’s bullish on Root stock primarily because the Nasdaq-listed firm reported “better-than-industry target loss ratio” in its recent earnings report.

Its gross loss ratio narrowed to 60.9% in Q4 – down from 78.1% a year ago and laid out a “path to profitable growth and scalability” as well, the analyst added.

You can read the letter to shareholders of on this link.

Root more than doubled its revenue in Q4

Note that Root Inc also saw its revenue more than double on a year-over-year basis in its fourth financial quarter. According to Jefferies analyst Yaron Kinar:

Accelerating growth, along with reduced reliance on reinsurance, show allow the company to scale up rapidly.

Kinar recommends owning Root stock as he’s convinced the Ohio-based company will grow revenue by a whopping 110% in 2024E and another 35% the year after.

His research note also told clients that will likely continue to grow its market share moving forward. The tech driven insurer, however, does not currently pay a dividend yield.

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