Is Root, Inc. overvalued or undervalued?

As of 7 May 2025, the valuation grade for Root, Inc. has moved from expensive to fair. Based on the analysis, the company appears to be fairly valued at this time. The P/E ratio stands at 40, while the PEG ratio is notably low at 0.27, indicating potential for growth relative to its earnings. Additionally, the ROE is reported at 17.90%, suggesting effective management of equity.
In comparison to its peers, Root, Inc. has a P/E ratio of 35.65, which is higher than Crawford & Co. at 16.08 but lower than GoHealth, Inc. at 4.94, which is considered attractive. The EV to EBITDA ratio for Root is significantly higher at 122.29 compared to Hippo Holdings, which has a negative P/E and a much lower EV to EBITDA of 13.82. Despite recent stock performance showing a 1-week decline of 9.76% against a slight drop in the S&P 500, Root's year-to-date return of 80.77% highlights its strong performance relative to broader market trends.