Is Root, Inc. overvalued or undervalued?

As of 4 September 2025, the valuation grade for Root, Inc. has moved from very attractive to attractive, indicating a shift in market perception. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 40, a Price to Book Value of 7.17, and an EV to Sales ratio of 1.56. In comparison, peers such as Ryan Specialty Holdings, Inc. have a significantly higher P/E of 95.23, while CorVel Corp. maintains a fair valuation with a P/E of 79.07.
Despite the overvaluation, Root, Inc. has demonstrated strong recent performance, with a year-to-date return of 39.1% compared to the S&P 500's 12.22%. This substantial outperformance over multiple periods, including a remarkable 156.01% return over the past year, suggests that market sentiment may still be optimistic about the company's future prospects, even as its current valuation metrics indicate a potential overvaluation.