Executive Summary
Roots Corporation, together with its subsidiaries, provides women’s, men’s, kids, toddler, and baby apparel; leather goods; footwear; and accessories under the Roots brand.
Rewards
Risk Analysis
Snowflake Analysis
Good value with moderate growth potential.
Share Price & News
How has Roots's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: ROOT has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
0%
ROOT
-0.2%
CA Specialty Retail
0.3%
CA Market
1 Year Return
-57.1%
ROOT
-11.5%
CA Specialty Retail
5.5%
CA Market
Return vs Industry: ROOT underperformed the Canadian Specialty Retail industry which returned -9.9% over the past year.
Return vs Market: ROOT underperformed the Canadian Market which returned 5.8% over the past year.
Shareholder returns
| ROOT | Industry | Market | |
|---|---|---|---|
| 7 Day | 0% | -0.2% | 0.3% |
| 30 Day | -6.0% | -1.3% | 0.5% |
| 90 Day | -10.4% | -0.3% | 3.5% |
| 1 Year | -57.1%-57.1% | -8.7%-11.5% | 8.8%5.5% |
| 3 Year | n/a | -19.6%-26.2% | 14.8%4.5% |
| 5 Year | n/a | -23.2%-33.5% | 34.1%14.5% |
Price Volatility Vs. Market
How volatile is Roots's share price compared to the market and industry in the last 5 years?
Simply Wall St News
1 week ago | Simply Wall St
Those Who Purchased Roots (TSE:ROOT) Shares A Year Ago Have A 52% Loss To Show For It1 month ago | Simply Wall St
Roots (TSE:ROOT) Use Of Debt Could Be Considered Risky2 months ago | Simply Wall St
Estimating The Fair Value Of Roots Corporation (TSE:ROOT)Valuation
Is Roots undervalued compared to its fair value and its price relative to the market?
28.3%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ROOT (CA$1.89) is trading below our estimate of fair value (CA$2.64)
Significantly Below Fair Value: ROOT is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: ROOT is poor value based on its PE Ratio (96.6x) compared to the Specialty Retail industry average (14.1x).
PE vs Market: ROOT is poor value based on its PE Ratio (96.6x) compared to the Canadian market (15.9x).
Price to Earnings Growth Ratio
PEG Ratio: ROOT is good value based on its PEG Ratio (1x)
Price to Book Ratio
PB vs Industry: ROOT is good value based on its PB Ratio (0.4x) compared to the CA Specialty Retail industry average (1.4x).
Next Steps
Future Growth
How is Roots forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?
97.7%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ROOT's forecast earnings growth (97.7% per year) is above the savings rate (1.4%).
Earnings vs Market: ROOT's earnings (97.7% per year) are forecast to grow faster than the Canadian market (10.4% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: ROOT's revenue (3.5% per year) is forecast to grow slower than the Canadian market (5% per year).
High Growth Revenue: ROOT's revenue (3.5% 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
Next Steps
Past Performance
How has Roots performed over the past 5 years?
11.2%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ROOT has a large one-off loss of CA$5.6M impacting its November 2 2019 financial results.
Growing Profit Margin: ROOT's current net profit margins (0.2%) are lower than last year (4.3%).
Past Earnings Growth Analysis
Earnings Trend: ROOT's earnings have grown by 11.2% per year over the past 5 years.
Accelerating Growth: ROOT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: ROOT had negative earnings growth (-94.1%) over the past year, making it difficult to compare to the Specialty Retail industry average (-10.5%).
Return on Equity
High ROE: ROOT's Return on Equity (0.4%) is considered low.
Return on Assets
Return on Capital Employed
Next Steps
Financial Health
How is Roots's financial position?
Financial Position Analysis
Short Term Liabilities: ROOT's short term assets (CA$85.3M) exceed its short term liabilities (CA$75.9M).
Long Term Liabilities: ROOT's short term assets (CA$85.3M) do not cover its long term liabilities (CA$272.9M).
Debt to Equity History and Analysis
Debt Level: ROOT's debt to equity ratio (68.1%) is considered high.
Reducing Debt: Insufficient data to determine if ROOT's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: ROOT's debt is well covered by operating cash flow (31.5%).
Interest Coverage: ROOT's interest payments on its debt are not well covered by EBIT (1.6x coverage).
Balance Sheet
Inventory Level: ROOT has a high level of physical assets or inventory.
Debt Coverage by Assets: ROOT's debt is not covered by short term assets (assets are 0.6x debt).
Next Steps
Dividend
What is Roots's current dividend yield, its reliability and sustainability?
Dividend Yield vs Market
Current dividend yield vs market & industry
Notable Dividend: Unable to evaluate ROOT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.
High Dividend: Unable to evaluate ROOT's dividend yield against the top 25% of dividend payers, as the company has not reported any 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.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of ROOT's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
0.7yrs
Average management tenure
CEO
Meghan Roach 0
0.08yrs
Tenure
Ms. Meghan Roach has been Interim Chief Executive Officer of Roots Corporation since January 03, 2020. She served as Interim Chief Financial Officer at Roots Corporation since August 9, 2019 until 2020. Ms ...
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Chief e-Commerce & Customer Experience Officer | 1.3yrs | CA$360.59k | no data | |
| Interim Chief Executive Officer | 0.08yrs | no data | no data | |
| Chief Financial Officer | 0.08yrs | no data | no data | |
| Head of Investor Relations | 0yrs | no data | no data | |
| VP & General Counsel | 0yrs | no data | no data | |
| Vice President of Marketing | 1.3yrs | no data | no data | |
| Vice President of Human Resources | 0yrs | no data | no data |
0.7yrs
Average Tenure
Experienced Management: ROOT's management team is not considered experienced ( 0.7 years average tenure), which suggests a new team.
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Lead Director | 2.3yrs | CA$119.00k | no data | |
| Chairman of the Board | 0yrs | no data | no data | |
| Director | 4.2yrs | no data | no data | |
| Independent Director | 2.8yrs | CA$105.00k | no data | |
| Independent Director | 2.3yrs | CA$115.00k | no data | |
| Independent Director | 1.7yrs | CA$70.00k | no data | |
| Independent Director | 2.3yrs | CA$104.00k | no data |
2.3yrs
Average Tenure
52yo
Average Age
Experienced Board: ROOT's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.
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 company bio, employee growth, exchange listings and data sources
Key Information
- Name: Roots Corporation
- Ticker: ROOT
- Exchange: TSX
- Founded: 1973
- Industry: Apparel Retail
- Sector: Retail
- Market Cap: CA$79.615m
- Shares outstanding: 42.12m
- Website: https://www.roots.com
Number of Employees
Location
- Roots Corporation
- 1400 Castlefield Avenue
- Toronto
- Ontario
- M6B 4C4
- Canada
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ROOT | TSX (The Toronto Stock Exchange) | Yes | Common Shares | CA | CAD | Oct 2017 |
| 4RO | DB (Deutsche Boerse AG) | Yes | Common Shares | DE | EUR | Oct 2017 |
| RROT.F | OTCPK (Pink Sheets LLC) | Yes | Common Shares | US | USD | Oct 2017 |
Biography
Roots Corporation, together with its subsidiaries, provides women’s, men’s, kids, toddler, and baby apparel; leather goods; footwear; and accessories under the Roots brand. 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. The Partners and Other segment engages primarily in the wholesale of Roots branded products to the company’s international operating partners. This segment is also involved in licensing Roots brand to manufacturing partners; wholesaling Roots branded products to retail partners; and selling custom Roots branded products to business clients. As of February 2, 2019, it operated 114 corporate retail stores in Canada, 7 corporate retail stores in the United States, 117 partner-operated stores in Taiwan, and 37 partner-operated stores in China, as well as e-commerce platforms. The company offers its products in approximately 50 countries. Roots Corporation was founded in 1973 and is headquartered in Toronto, Canada.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/02/18 01:16 |
| End of Day Share Price | 2020/02/14 00:00 |
| Earnings | 2019/11/02 |
| Annual Earnings | 2019/02/02 |
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.