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ROOT

Roots TSX:ROOT Stock Report

Last Price

CA$3.19

Market Cap

CA$133.0m

7D

1.3%

1Y

-18.4%

Updated

26 Jun, 2022

Data

Company Financials +
ROOT fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance2/6
Financial Health5/6
Dividends0/6

ROOT Stock Overview

Roots Corporation, together with its subsidiaries, designs, markets, and sells apparel, leather goods, footwear, and accessories under the Roots brand in Canada and internationally.

Rewards

Trading at 62.1% below our estimate of its fair value

Risk Analysis

Earnings have declined by 10.5% per year over past 5 years

Large one-off items impacting financial results


Roots Competitors

 

 

 

 

 

 

 

 

 

 

 

 

Price History & Performance

Summary of all time highs, changes and price drops for Roots
Historical stock prices
Current Share PriceCA$3.19
52 Week HighCA$4.39
52 Week LowCA$2.65
Beta3.48
1 Month Change-4.78%
3 Month Change-1.85%
1 Year Change-18.41%
3 Year Change-8.60%
5 Year Changen/a
Change since IPO-68.10%

Recent News & Updates

Shareholder Returns

ROOTCA Specialty RetailCA Market
7D1.3%5.0%0.3%
1Y-18.4%-20.1%-4.0%

Return vs Industry: ROOT exceeded the Canadian Specialty Retail industry which returned -20% over the past year.

Return vs Market: ROOT underperformed the Canadian Market which returned -4.1% over the past year.

Price Volatility

Is ROOT's price volatile compared to industry and market?
ROOT volatility
ROOT Average Weekly Movement5.4%
Specialty Retail Industry Average Movement6.5%
Market Average Movement10.0%
10% most volatile stocks in CA Market17.3%
10% least volatile stocks in CA Market4.4%

Stable Share Price: ROOT is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: ROOT's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1973n/aMeghan Roachhttps://www.roots.com

Roots Corporation, together with its subsidiaries, designs, markets, and sells apparel, leather goods, footwear, and accessories under the Roots brand in Canada and internationally. The company operates through two segments, Direct-To-Consumer, and Partners and Other. The Direct-to-Consumer segment sells products through the company’s corporate retail stores and e-commerce.

Roots Fundamentals Summary

How do Roots's earnings and revenue compare to its market cap?
ROOT fundamental statistics
Market CapCA$133.01m
Earnings (TTM)CA$22.44m
Revenue (TTM)CA$279.56m

5.9x

P/E Ratio

0.5x

P/S Ratio

Is ROOT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ROOT income statement (TTM)
RevenueCA$279.56m
Cost of RevenueCA$113.88m
Gross ProfitCA$165.69m
Other ExpensesCA$143.25m
EarningsCA$22.44m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.54
Gross Margin59.27%
Net Profit Margin8.03%
Debt/Equity Ratio33.0%

How did ROOT perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is ROOT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ROOT?

Other financial metrics that can be useful for relative valuation.

ROOT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.9x
Enterprise Value/EBITDA6x
PEG Ration/a

Price to Earnings Ratio vs Peers

How does ROOT's PE Ratio compare to its peers?

ROOT PE Ratio vs Peers
The above table shows the PE ratio for ROOT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average17.9x

Price-To-Earnings vs Peers: ROOT is good value based on its Price-To-Earnings Ratio (5.9x) compared to the peer average (17.9x).

Price to Earnings Ratio vs Industry

How does ROOT's PE Ratio compare vs other companies in the Specialty Retail Industry?

Price-To-Earnings vs Industry: ROOT is good value based on its Price-To-Earnings Ratio (5.9x) compared to the Canadian Specialty Retail industry average (7.9x)

Price to Earnings Ratio vs Fair Ratio

What is ROOT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ROOT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio5.9x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate ROOT's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of ROOT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ROOT (CA$3.19) is trading below our estimate of fair value (CA$8.41)

Significantly Below Fair Value: ROOT is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ROOT's PEG Ratio to determine if it is good value.

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Future Growth

How is Roots forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE

3.0%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if ROOT's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if ROOT's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if ROOT's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ROOT's revenue (3% per year) is forecast to grow slower than the Canadian market (7.3% per year).

High Growth Revenue: ROOT's revenue (3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if ROOT's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Roots performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE

-10.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ROOT has a large one-off gain of CA$5.5M impacting its April 30 2022 financial results.

Growing Profit Margin: ROOT's current net profit margins (8%) are higher than last year (6.4%).

Past Earnings Growth Analysis

Earnings Trend: ROOT's earnings have declined by 10.5% per year over the past 5 years.

Accelerating Growth: ROOT's earnings growth over the past year (41.2%) exceeds its 5-year average (-10.5% per year).

Earnings vs Industry: ROOT earnings growth over the past year (41.2%) underperformed the Specialty Retail industry 47.3%.

Return on Equity

High ROE: ROOT's Return on Equity (12.4%) is considered low.

Discover strong past performing companies

Financial Health

How is Roots's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: ROOT's short term assets (CA$67.0M) exceed its short term liabilities (CA$52.8M).

Long Term Liabilities: ROOT's short term assets (CA$67.0M) do not cover its long term liabilities (CA$136.7M).

Debt to Equity History and Analysis

Debt Level: ROOT's net debt to equity ratio (21.7%) is considered satisfactory.

Reducing Debt: ROOT's debt to equity ratio has reduced from 52.1% to 33% over the past 5 years.

Debt Coverage: ROOT's debt is well covered by operating cash flow (100%).

Interest Coverage: ROOT's interest payments on its debt are well covered by EBIT (4x coverage).

Balance Sheet

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Dividend

What is Roots's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ROOT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ROOT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ROOT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ROOT's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ROOT has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure

CEO

Meghan Roach

2.42yrs

Tenure

CA$1,466,959

Compensation

Ms. Meghan Roach serves as Chief Executive Officer, President and Director of Roots Corporation since May 26, 2020. She had been Interim Chief Executive Officer of Roots Corporation since January 03, 2020...

CEO Compensation Analysis

Compensation vs Market: Meghan's total compensation ($USD1.14M) is above average for companies of similar size in the Canadian market ($USD175.79K).

Compensation vs Earnings: Insufficient data to compare Meghan's compensation with company performance.

Leadership Team

Experienced Management: ROOT's management team is considered experienced (2.4 years average tenure).

Board Members

Experienced Board: ROOT's board of directors are considered experienced (4.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Company Information

Roots Corporation's employee growth, exchange listings and data sources

Key Information

  • Name: Roots Corporation
  • Ticker: ROOT
  • Exchange: TSX
  • Founded: 1973
  • Industry: Apparel Retail
  • Sector: Retail
  • Implied Market Cap: CA$133.008m
  • Shares outstanding: 41.70m
  • Website: https://www.roots.com

Number of Employees

Location

  • Roots Corporation
  • 1400 Castlefield Avenue
  • Toronto
  • Ontario
  • M6B 4C4
  • Canada

Listings

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/26 00:00
End of Day Share Price2022/06/24 00:00
Earnings2022/04/30
Annual Earnings2022/01/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.