Root Q3 revenue slightly misses estimates

Overview

• U.S. car insurance tech firm's Q3 revenue was a slight miss against analyst expectations

• Q3 adjusted EPS was $0.86

Outlook

• Root expects to complete its $18.3 mln real-property acquisition in Q4 2026, subject to customary closing conditions

• Company has $38.8 mln remaining under its Class A share repurchase program, which has no set expiration date

• Expects existing liquidity to fund working capital and capex for at least the next 12 months

Result Drivers

• LOWER MARKETING SPEND – Sales and marketing expense fell $8.4 mln as Root cut direct performance and experimental marketing amid heightened competition

• FAVORABLE RESERVE DEVELOPMENT – Loss and LAE declined $6.0 mln on lower premiums earned and favorable prior-year reserve development from lower-than-anticipated claim emergence

• LOWER CARVANA WARRANT COSTS – Other insurance expense fell $6.8 mln, helped by a $15.3 mln decline in Carvana warrant expense following a 2025 catch-up charge

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the property & casualty insurance peer group is "hold"

• Wall Street's median 12-month price target for Root Inc is $53.00, about 1.6% below its November 3 closing price of $53.87

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 19 three months ago

Reuters Recommended Reads

• Nov 4 - Palomar Q3 net income beat estimates as premiums rise 28%

• Nov 4 - Allstate Q3 net income falls due to higher catastrophe losses, absence of prior-year sale gain

• Nov 4 - Horace Mann lifts 2026 outlook as Q3 earnings beat estimates, P&C combined ratio improves to 83.6%

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)