Root shares surge 36% following Q3 top line beat
Shares of Root surged in Thursday trading after the InsurTech posted a wider Q3 net loss but beat Wall Street estimates on top-line growth and loss per share.
The stock leaped $1.69, or 36%, to $6.39 by the early afternoon, after moving up over 20% to $5.89 early in the morning session. By late morning, Root’s stock had already generated an extraordinary level of trading volume, with over 17 million shares changing. Typically, about 8.3 million of Root’s shares change hands throughout a full trading day.
By mid-afternoon, the gain for the day stood at 28%, or about $1.32 per share, to $6.00.
Root posted a $133mn net loss after the markets closed Wednesday, a 56% expansion from the $85.2mn loss for Q3 2020. Its direct loss ratio rose by three points to 92.7%
The company said its loss per share was $0.53, smaller than the $0.69 per share, on average, expected by analysts. It reported revenue of $93.mn, well above the consensus estimate of $59.5mn.
There has also been increasing levels of chatter on social media about the company, leading some to speculate the InsurTech is among the crop of meme stocks, which could help fuel the gains.
Root shares remain down 73% from their closing high of $21.77 in February and 57% below its debut of $27 on October 28, 2020.
Fellow InsurTech Lemonade was up 6.78% in afternoon trading to $4.29 per share, and is down 5.46% or $3.88 per share from the $70.45 share price before its deal to acquire Metromile was announced.