Root Gears Up to Report Q1 Earnings: Here's What to Expect

Root, Inc. ROOT is expected to register an improvement in its top and bottom lines when it reports first-quarter 2025 results on May 7, after the closing bell.

The Zacks Consensus Estimate for ROOT’s first-quarter revenues is pegged at $305 million, indicating 19.6% growth from the year-ago reported figure.

The consensus estimate for earnings is pegged at 45 cents per share. The Zacks Consensus Estimate for ROOT’s first-quarter earnings has moved up 36.4% in the past 30 days. The estimate suggests a year-over-year increase of 207.1%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

What the Zacks Model Unveils for ROOT

Our proven model predicts an earnings beat for Assurant this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the chances of an earnings beat.

Earnings ESP: Assurant has an Earnings ESP of +25.84%. This is because the Most Accurate Estimate of 56 cents is pegged higher than the Zacks Consensus Estimate of 45 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Root, Inc. Price and EPS Surprise

Root, Inc. price-eps-surprise | Root, Inc. Quote

Zacks Rank:  ROOT sports a Zacks Rank #1 at present.

Factors Likely to Shape Q1 Results of ROOT

Higher net premiums earned, improved net investment income, increased fee income and other income are expected to have favored the company’s top line in the first quarter.

Increase in policies in force, continued growth in partnership channel, reduced external quota share cessions of gross premiums earned to reinsurers between periods and greater premium per policy resulting from rate actions are likely to have aided the net premiums earned. The Zacks Consensus Estimate for first-quarter net investment income is pegged at $279 million. 

Net investment income is likely to have increased from a higher average cash balance and a larger investment portfolio. The upside is likely to have been partially offset by an increase in impairment related to low-income housing tax credit utilization. The Zacks Consensus Estimate for first-quarter net investment income is pegged at $9 million. 

Better pricing and increased exposure, coupled with prudent underwriting, are expected to have improved underwriting profitability, leading to an improvement in the combined ratio. However, catastrophe losses relating to the recent California wildfires are likely to have weighed on the improvement.

Total operating expenses might have escalated because of higher loss and loss adjustment expenses, sales and marketing, other insurance expense, technology and development, and general and administrative expenses.

Other Stocks to Consider

Here are some other finance stocks you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:

Primerica, Inc. PRI has an Earnings ESP of +0.46% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $4.77, indicating an increase of 21.9% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

PRI’s earnings beat estimates in three of the last four reported quarters and missed in one.

Lincoln National Corporation LNC has an Earnings ESP of +0.34% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $1.54, indicating an increase of 12.4% from the year-ago reported figure. 

LNC’s earnings beat estimates in each of the last four quarters.

Jones Lang LaSalle Incorporated JLL has an Earnings ESP of +7.43% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $2.02, indicating an increase of 13.4% from the year-ago reported figure. 

JLL’s earnings beat estimates in each of the last four quarters.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research