TSX:ROOT

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Roots Corporation, together with its subsidiaries, provides apparel, leather goods, footwear, and accessories under the Roots brand.


Snowflake Analysis

Overvalued with worrying balance sheet.

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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.5%

ROOT

2.4%

CA Specialty Retail

1.4%

CA Market


1 Year Return

-66.0%

ROOT

-32.9%

CA Specialty Retail

-11.3%

CA Market

Return vs Industry: ROOT underperformed the Canadian Specialty Retail industry which returned -32.9% over the past year.

Return vs Market: ROOT underperformed the Canadian Market which returned -11.3% over the past year.


Shareholder returns

ROOTIndustryMarket
7 Day7.5%2.4%1.4%
30 Day0%6.1%4.2%
90 Day-35.8%-21.9%-9.4%
1 Year-66.0%-66.0%-30.9%-32.9%-8.3%-11.3%
3 Yearn/a-40.0%-44.7%0.04%-9.2%
5 Yearn/a-38.5%-46.4%16.7%-0.01%

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

Valuation

Is Roots undervalued compared to its fair value and its price relative to the market?

0.32x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: ROOT (CA$1.15) is trading above our estimate of fair value (CA$0.93)

Significantly Below Fair Value: ROOT is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ROOT is unprofitable, so we can't compare its PE Ratio to the Specialty Retail industry average.

PE vs Market: ROOT is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: ROOT is good value based on its PB Ratio (0.3x) compared to the CA Specialty Retail industry average (1x).


Next Steps

Future Growth

How is Roots forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-5.2%

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 (1.7%).

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 earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ROOT's revenue is expected to decline over the next 3 years (-5.2% per year).

High Growth Revenue: ROOT's revenue is forecast to decline over the next 3 years (-5.2% 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?

-40.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ROOT is currently unprofitable.

Growing Profit Margin: ROOT is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ROOT is unprofitable, and losses have increased over the past 5 years at a rate of -40.3% per year.

Accelerating Growth: Unable to compare ROOT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ROOT is unprofitable, making it difficult to compare its past year earnings growth to the Specialty Retail industry (1.2%).


Return on Equity

High ROE: ROOT has a negative Return on Equity (-41.21%), as it is currently unprofitable.


Next Steps

Financial Health

How is Roots's financial position?


Financial Position Analysis

Short Term Liabilities: ROOT's short term assets (CA$53.7M) do not cover its short term liabilities (CA$67.2M).

Long Term Liabilities: ROOT's short term assets (CA$53.7M) do not cover its long term liabilities (CA$223.1M).


Debt to Equity History and Analysis

Debt Level: ROOT's debt to equity ratio (64.3%) 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 (41.4%).

Interest Coverage: ROOT is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

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


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.


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?

1.0yrs

Average management tenure


CEO

Meghan Roach

0.42

Tenure

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


Leadership Team

NamePositionTenureCompensationOwnership
James Connell
Chief e-Commerce & Customer Experience Officer1.58yrsCA$360.59kno data
Meghan Roach
CEO & Director0.42yrno datano data
Mona Kennedy
Chief Financial Officer0.42yrno datano data
Kristen Davies
Head of Investor Relationsno datano datano data
Kaleb Honsberger
VP & General Counselno datano datano data
Karen Zuccala
Vice President of Marketing1.58yrsno datano data
Michelle Lettner
Vice President of Human Resourcesno datano datano data

1.0yrs

Average Tenure

Experienced Management: ROOT's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Meghan Roach
CEO & Director0.42yrno datano data
Dale Lastman
Independent Lead Director2.67yrsCA$119.00kno data
Erol Uzumeri
Chairman of the Boardno datano datano data
Eric Zinterhofer
Director4.5yrsno datano data
Joel Teitelbaum
Independent Director3.17yrsCA$105.00kno data
Richard Mavrinac
Independent Director2.67yrsCA$115.00kno data
Mary Curran
Independent Director2yrsCA$70.00kno data
Gregory David
Independent Director2.67yrsCA$104.00kno data

2.7yrs

Average Tenure

52yo

Average Age

Experienced Board: ROOT's board of directors are not considered experienced ( 2.7 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$48.443m
  • Shares outstanding: 42.12m
  • Website: https://www.roots.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ROOTTSX (The Toronto Stock Exchange)YesCommon SharesCACADOct 2017
4RODB (Deutsche Boerse AG)YesCommon SharesDEEUROct 2017
RROT.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDOct 2017

Biography

Roots Corporation, together with its subsidiaries, provides 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 is involved primarily in the wholesale of Roots branded products to the company’s international operating partners. This segment also engages 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 April 29, 2020, it operated 114 corporate retail stores in Canada, two corporate retail stores in the United States, 115 partner-operated stores in Taiwan, 36 partner-operated stores in China, and two partner-operated store in Hong Kong, as well as e-commerce platforms. Roots Corporation was founded in 1973 and is headquartered in Toronto, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/02 06:04
End of Day Share Price2020/06/01 00:00
Earnings2020/02/01
Annual Earnings2020/02/01


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.