Root Struggles to Find Path to Profitability, Cuts Headcount by 20%

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The company uses data from telematics devices to price insurance premiums based on driving behavior. Root ($NASDAQ:ROOT) has struggled to find a path to profitability, and has been forced to make two rounds of job cuts this year. Root’s CEO Alex Timm has said that the company is ” laser focused on achieving profitability” and that the job cuts are part of that goal.

Share Price

In an effort to cut costs, the company has reduced its headcount by 20%. Despite these cost-cutting measures, the company’s stock has soared by 19.1% from its prior closing price. However, the company’s media exposure has been mostly negative.

VI Analysis

Fundamentals are a key reflection of a company’s long term potential. The VI app makes it easy to analyze a company’s fundamentals and compare them to its peers. Cheetah companies are typically of interest to growth investors who are willing to accept higher risks in exchange for potentially higher rewards. ROOT INC is strong in growth, medium in asset quality, and weak in dividend yield and profitability. Its health score of 2/10 indicates that it is less likely to safely ride out any crisis without the risk of bankruptcy.

VI Peers

Its main competitors are Metromile Inc, Lemonade Inc, and 360 DigiTech Inc. All three companies offer similar services, but Root Inc has a few key features that set it apart from the others.

– Metromile Inc ($NYSE:LMND)

Lemonade Inc is a publicly traded company that provides insurance services. The company has a market capitalization of 1.27 billion as of 2022 and a return on equity of -19.17%. The company was founded in 2013 and is headquartered in New York, New York. Lemonade Inc offers insurance products through its subsidiary, Lemonade Insurance Company. The company underwrites and sells property and casualty insurance policies in the United States.

– Lemonade Inc ($NASDAQ:QFIN)

DigiTech Inc has a market cap of 1.92B as of 2022, a Return on Equity of 22.64%. The company is a leading provider of digital marketing and advertising solutions. It offers a suite of products and services that help businesses reach their customers online and through mobile devices.

Summary

Investing in ROOT Inc. may be a risky proposition, as the company has struggled to find profitability and has recently cut headcount by 20%. However, the stock price moved up the same day that these cuts were announced, indicating that investors are still bullish on the company’s prospects. ROOT Inc. may be a risky investment, but it could also pay off handsomely if the company can turn things around.