Root, Inc. (ROOT): A Bull Case Theory
We came across a bullish thesis on Root, Inc. on Value investing subreddit by mike-some. In this article, we will summarize the bulls’ thesis on Root. Root, Inc.'s share was trading at $95.29 as of September 17th. Root’s trailing and forward P/E were 18.52 and 3.60 respectively according to Yahoo Finance.
ROOT Insurance is carving out a distinctive position in the auto insurance market by offering the lowest-cost coverage for objectively safe drivers, leveraging telematics as the foundation of its underwriting. Prospective customers undergo a three-week driver safety test, with only about 70% passing, ensuring that ROOT avoids high-risk drivers and maintains best-in-industry loss ratios. This disciplined approach allows customers to save an average of $900 per year, creating a compelling value proposition. Customer acquisition, traditionally a challenging aspect of the insurance business due to policy stickiness, is being addressed through strategic partnerships.
ROOT embeds itself with partners such as Carvana and Hyundai, positioning itself as the preferred carrier at the point of sale—a channel that is increasingly contributing to new policy growth. Founder-led and still in the early stages of expansion, ROOT is currently licensed in 35 states with ambitions to become a national carrier, signaling substantial growth potential. The company has already achieved $1.4 billion in trailing twelve-month revenue, and at an estimated 6% margin at scale and a 25x multiple, the stock’s fair value is projected around $140 per share.
This combination of disciplined underwriting, innovative distribution channels, and significant expansion potential positions ROOT as an intriguing investment opportunity with both defensive characteristics—through its focus on low-risk drivers—and considerable upside as it scales its national presence. Investors benefit from a clear growth narrative supported by structural advantages in underwriting and distribution, providing a compelling risk/reward profile in the competitive auto insurance market.
Previously we covered a bullish thesison Root, Inc. (ROOT) by Creative-Cranberry47 in May 2025, which highlighted its breakout Q1 earnings, strong underwriting, and expanding partnerships. The company's stock price has depreciated approximately 35% since our coverage due to broader market pressures. The thesis still stands as ROOT’s tech-driven underwriting and scalable growth remain intact. Mike-some shares a similar perspective but emphasizes low-cost coverage for safe drivers and national expansion.
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