Yahoo Finance Forecast: Analysts Think Root, Inc.'s (NASDAQ:ROOT) Business Prospects Have Improved Drastically
Shareholders in Root, Inc. (NASDAQ:ROOT) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
Following the upgrade, the current consensus from Root's eight analysts is for revenues of US$1.1b in 2024 which - if met - would reflect a sizeable 65% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 32% to US$5.14 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$928m and losses of US$9.04 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
See our latest analysis for Root
It will come as no surprise to learn that the analysts have increased their price target for Root 32% to US$57.25 on the back of these upgrades.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Root's rate of growth is expected to accelerate meaningfully, with the forecast 95% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 18% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Root is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Root's prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Root.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential concerns with Root, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
