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

Root Inc IPO Valuation Analysis (Insurtech SaaS)

Root Inc IPO Preview - The Next Snowflake?

Algosun Global

Equity Bottom-Up

<p>In December Root shares fell ~22% after insurtech unicorn reported its first quarterly earnings as a public company. As of Q3-20 GAAP net loss reached $85 million and GAAP revenue collapsed to $51 million due to changing of reinsurance structure starting July 2020. During the reported quarter ceded earned premium grew to ~$110 million, 354% YoY growth and was 71% as percentage of direct earned premium while net earned premium significantly fell to $45 million and dropped ~41% YoY. New reinsurance program caused a reduction in GAAP revenue versus prior quarters.</p><p>In October 2020 Root completed its IPO and received net proceeds of $1.1 billion after deducting offering costs of ~$53 million. Car insurance company priced IPO above range at $27 per share. Now stock is trading around $15 a share and fell ~45% since IPO. We believe that worst-case scenario for Root stock may be priced in and shares have limited downside potential. Consensus estimates for 2021 revenue look pessimistic and assume YoY contraction in revenue. In our insight we will focus on key drivers and catalysts that may support shares and discuss why Root should establish partnership with automaker or EV manufacturer to grow its business and customer base going forward.</p>

In December Root shares fell ~22% after insurtech unicorn reported its first quarterly earnings as a public company. As of Q3-20 GAAP net loss reached $85 million and GAAP revenue collapsed to $51 million due to changing of reinsurance structure starting July 2020. During the reported quarter ceded earned premium grew to ~$110 million, 354% YoY growth and was 71% as percentage of direct earned premium while net earned premium significantly fell to $45 million and dropped ~41% YoY. New reinsurance program caused a reduction in GAAP revenue versus prior quarters.In October 2020 Root completed its IPO and received net proceeds of $1.1 billion after deducting offering costs of ~$53 million. Car insurance company priced IPO above range at $27 per share. Now stock is trading around $15 a share and fell ~45% since IPO. We believe that worst-case scenario for Root stock may be priced in and shares have limited downside potential. Consensus estimates for 2021 revenue look pessimistic and assume YoY contraction in revenue. In our insight we will focus on key drivers and catalysts that may support shares and discuss why Root should establish partnership with automaker or EV manufacturer to grow its business and customer base going forward.

Root Stock Is Showing Signs Of Bottoming Out

Root /OH

Root Stock Is Showing Signs Of Bottoming Out