MeritValue

Root, Inc.

ROOTdata completeness 100%8 fiscal years on file
The thesis, from the filings

Root, Inc. earns about -53% on equity, below its ~9% cost of capital, but has diluted owners by 24% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $230.11 and $247.29 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$345.4M1$310.8M2$455M3$1.18B3$1.52B3
Net income−$521.1M4−$297.7M5−$147.4M6$30.9M6$40.3M6
Operating cash flow−$403.4M7−$210.6M8−$33.6M9$195.7M9$206.5M9
Capital expenditure$4.6M10$011$200,00012$400,00012$012
Free cash flow (derived)−$408M7−$210.6M8−$33.8M9$195.3M9$206.5M9
Total debt$013$295.4M14$299M15$200.1M16$200.3M16
Cash & equivalents$706M17$762.1M18$678.7M19$599.3M20$669.3M20
Diluted shares13.8M14.1M14.4M16.9M17.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$166.26
your share of equity
Profit it earned you last year
$23.57
Free cash flow it threw off
$120.76
Debt you’d be carrying
$117.13

10 shares is a claim on $166.26 of net worth that earned you $23.57 and generated $120.76 of cash last year, against $117.13 of debt.

iii. Is this a good business?
Moat signal · return on equity
-53% avg · 5y
FY21 -97%FY22 -107%FY23 -89%FY24 15%FY25 14%

It earned about -53% on equity against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+24% shares · 5y

Share count is up 24% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $230.11 and $247.29 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$247.29
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$195.3M
DCF · Growth Exit 5Y
$230.11
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$195.3M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
$29.71
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $230.11
The three cases
Bear0.0%$190.61
Base5.0%$230.11
Bull10.0%$277.37

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001628280-24-005906 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001628280-25-008137 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001788882-26-000014 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001628280-24-005906 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001628280-25-008137 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001788882-26-000014 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001628280-24-005906 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001628280-25-008137 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001788882-26-000014 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001628280-24-005906 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001628280-25-008137 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001788882-26-000014 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001628280-23-004580 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0001628280-24-005906 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0001628280-25-008137 (LongTermDebt)
  16. 10-K · period ending 2024-12-31 · accession 0001788882-26-000014 (LongTermDebt)
  17. 10-K · period ending 2021-12-31 · accession 0001628280-23-004580 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001628280-24-005906 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001628280-25-008137 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001788882-26-000014 (CashAndCashEquivalentsAtCarryingValue)