Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

A highly collaborative investment professional and research analyst with 10+ years of international experience in equity research, treasury operations, and trading positions across multiple asset classes at leading multinational banks Citibank and Morgan Stanley, UHNWI-backed family office and European independent equity research firm. A respectable background in equity capital markets, corporate treasury, investment banking operations, equity research analysis and portfolio management.

Root Stock Is Showing Signs Of Bottoming Out

Root Inc IPO Valuation Analysis (Insurtech SaaS)

Root Inc IPO Preview - The Next Snowflake?

Lemonade. Disruptive Insurtech Unicorn Worth Paying Attention To

Algosun Global

Equity Capital Markets

<p style="text-align: justify;">In October VC-backed app-based car insurance unicorn Root announced pricing of its IPO and sold ~27 million shares of Class A common stock at IPO price of $27 a share (above its initial target range of $22-25). Columbus insurtech startup raised more than $1 billion dollars and funds affiliated with Dragoneer Investment Group and Silver Lake Technology agreed to purchase an aggregate of up to $500 million worth of shares in private placements. We saw solid demand for Root Insurance IPO. However, Root shares fell ~16% below IPO price and we believe this is a great buying opportunity for long-term investors.</p><p style="text-align: justify;">Root is a fully licensed insurance carrier with a scaled proprietary telematics solution and operates on fast growing Pay-How-You-Drive (PHYD) segment of insurance telematics market. Under PHYD model driver may control the cost of insurance premium. Furthermore, company offers such products as Root Renters and Root Home cross-selling non-auto products across its customer base. At 14x and 11x forward EV/Revenue on our CY20 and CY21 estimates, which is a significant ~60% discount to its closest publicly listed peer Lemonade, Root valuations look attractive under our base case scenario. If we look at forward adjusted gross profit multiples, Root shares trade at 49x EV/Adj. Gross Profit on our CY21 estimates. This is a modest discount to insurtech peer Lemonade.</p>

In October VC-backed app-based car insurance unicorn Root announced pricing of its IPO and sold ~27 million shares of Class A common stock at IPO price of $27 a share (above its initial target range of $22-25). Columbus insurtech startup raised more than $1 billion dollars and funds affiliated with Dragoneer Investment Group and Silver Lake Technology agreed to purchase an aggregate of up to $500 million worth of shares in private placements. We saw solid demand for Root Insurance IPO. However, Root shares fell ~16% below IPO price and we believe this is a great buying opportunity for long-term investors.Root is a fully licensed insurance carrier with a scaled proprietary telematics solution and operates on fast growing Pay-How-You-Drive (PHYD) segment of insurance telematics market. Under PHYD model driver may control the cost of insurance premium. Furthermore, company offers such products as Root Renters and Root Home cross-selling non-auto products across its customer base. At 14x and 11x forward EV/Revenue on our CY20 and CY21 estimates, which is a significant ~60% discount to its closest publicly listed peer Lemonade, Root valuations look attractive under our base case scenario. If we look at forward adjusted gross profit multiples, Root shares trade at 49x EV/Adj. Gross Profit on our CY21 estimates. This is a modest discount to insurtech peer Lemonade.

Root Insurance. Leader And Innovator In Pay-How-You-Drive (PHYD) Segment

Root /OH

Root Insurance. Leader And Innovator In Pay-How-You-Drive (PHYD) Segment