"Conservative investors might prefer to own shares of traditional insurance companies like Allstate ( NYSE:ALL) and Progressive ( NYSE:PGR), and that's fine. However, if you're more adventurous, you might choose to look into modern disrupters like Lemonade ( NYSE:LMND), Trupanion ( NASDAQ:TRUP), Hippo ( NYSE:HIPO), and the subject of today's analysis, Root, Inc. ( NASDAQ:ROOT). There are risks to investing in high-tech insurance plays, but the potential rewards could be substantial."
"To sum it up, Root, Inc.'s shareholders have experienced thrills and spills over the past 12 months. It was only a year ago that ROOT stock traded near $40; by April 2025, it had broken above $175. Then, Root, Inc. stock seemingly ran out of steam; currently, it's priced between $100 and $105. The billion-dollar question, then, is whether ROOT stock can reclaim its former glory at the $175 level."
"That's a tall order from a mathematical standpoint. It's a 42.9% drop from $175 to $100, but it's a 75% climb from $100 back to $175. It's nice to imagine ROOT stock surging 75% and revisiting $175 by the end of this year. Yet, that's asking a lot of the stock and pretty soon, there will only be three months left in 2025."
Conservative investors often prefer traditional insurance companies like Allstate and Progressive, while adventurous investors consider disruptors such as Lemonade, Trupanion, Hippo, and Root, Inc. There are risks to investing in high-tech insurance plays, but the potential rewards could be substantial. Root stock moved from near $40 a year ago to above $175 by April 2025, then fell to about $100–$105. A drop from $175 to $100 equals a 42.9% fall, while regaining $175 requires a 75% rise from $100. Reaching $175 by year-end would be aggressive given limited time; a year or two is more realistic if valuation stays reasonable. Investigating the company's financials and overall value proposition is advised, with the value proposition appearing positive overall.
Read at 24/7 Wall St.
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