Update shared on 28 Oct 2025
The analyst consensus price target for Root has shifted downward, dropping from $140 to $105 according to recent updates. Analysts cite mixed performance in premium growth and profitability, despite better-than-expected earnings.
Analyst Commentary
Analysts provided a range of perspectives on Root following its latest results and updates to price targets. Their commentary highlights both positive and cautionary factors influencing the outlook for the company.
Bullish Takeaways- Bullish analysts highlighted stronger-than-anticipated operating income, with the company outperforming expectations on both its own forecasts and consensus estimates.
- Improvement in loss ratios was noted, signaling better risk management and operating efficiency than previously expected.
- Some upward adjustments to price targets reflect optimism regarding premium growth trends, even in a challenging environment.
- Bearish analysts expressed concern over weaker-than-expected policy-in-force (PIF) growth, which may limit near-term expansion and revenue momentum.
- Despite profitability improvements, there is caution that premium growth may not be sustainable at recent levels.
- Neutral ratings and downward price target revisions indicate skepticism about the company’s valuation relative to its execution risks and operating volatility.
What's in the News
- Root Insurance expanded into Washington, completing coverage of the entire West Coast and now serving drivers in Washington, Oregon, and California (Key Developments).
- The company’s data-driven insurance pricing model now reaches over 78% of the U.S. population, with a focus on rewarding safe driving behaviors through advanced mobile technology and data science (Key Developments).
- Washington drivers can now sign up digitally through the Root app, complete a driving behavior test, and may save up to $1,200 annually with rates tailored to their driving habits (Key Developments).
- Root works with technology leaders and independent agents to provide broader and more convenient access to its digital insurance services in Washington (Key Developments).
Valuation Changes
- Fair Value Estimate remains unchanged at $124.40 per share.
- Discount Rate holds steady at 6.78 percent, indicating no reassessment of risk profile.
- Revenue Growth projection is virtually flat, with only a negligible reduction from 10.68 percent to 10.68 percent.
- Net Profit Margin forecast is unchanged at 4.09 percent.
- Future P/E Ratio remains nearly identical, moving marginally lower to 32.06x.
Disclaimer
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