Roots Corporation (ROOT) AI Stock Analysis

• Market Cap: C$130.74M
• Dividend Yield: N/A
• Average Volume (3M): 1.99K
• Price to Earnings (P/E): 30.4
• Beta (1Y): 0.40
• Revenue Growth: 2.63%
• EPS Growth: -3376.73%
• Country: CA
• Employees: 1,788
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Apparel - Retail
• EPS (TTM): -0.20
• Shares Outstanding: 40,350,900
• 10 Day Avg. Volume: 1,754
• 30 Day Avg. Volume: 1,992
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$3.75
• Price Target Upside: 15.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 61 Neutral
• Price Target: C$3.50 ▲(8.02% Upside)

Roots Corporation's overall stock score is driven by strong earnings call results, indicating positive sales growth and strategic initiatives. However, financial performance is hindered by profitability challenges and a negative P/E ratio, impacting valuation. Technical analysis supports a positive trend, but the lack of dividend yield and negative earnings weigh on the overall score.

Roots Corporation Business Overview & Revenue Model

Company Description

Roots Corporation (ROOT) is a prominent player in the retail industry, known for its high-quality apparel and accessories inspired by the Canadian lifestyle. The company designs, markets, and sells a wide range of products including clothing, leather goods, footwear, and athletic wear. With a strong emphasis on craftsmanship and sustainable practices, Roots Corporation has established itself as a beloved brand both in Canada and internationally.

How the Company Makes Money

Roots Corporation makes money primarily through the sale of its products in retail stores, online platforms, and through international franchises. The company's revenue streams are diversified across various product categories, including apparel, leather goods, and footwear, which are sold directly to consumers via company-owned stores and e-commerce channels. Additionally, Roots Corporation benefits from licensing agreements and partnerships that allow for expanded distribution and brand presence in global markets. The company also capitalizes on seasonal collections and collaborations with other brands or designers to drive sales and attract new customers.

Roots Corporation Financial Statement Overview

Summary

Roots Corporation's financial performance is mixed. The company faces profitability challenges with a negative net profit margin and stagnant revenue growth. However, it maintains a stable balance sheet and strong operating cash flows, indicating efficient liquidity management. Key areas for improvement include profitability and cost management.

Income Statement

Roots Corporation's income statement reveals declining profitability with a negative net profit margin of -12.23% in TTM, indicating financial struggles. The gross profit margin is relatively healthy at 60.13%, but the company is facing challenges in controlling costs below the gross margin line. Revenue growth has been stagnant with a slight increase of 0.96% from the previous year, indicating limited expansion. EBIT and EBITDA margins are also under pressure, with the TTM EBIT margin at 5.92% and a negative EBITDA margin, reflecting operational inefficiencies.

Balance Sheet

The balance sheet of Roots Corporation shows moderate leverage with a debt-to-equity ratio of 0.75 in TTM, which suggests some reliance on debt but not excessive. The equity ratio stands at 49.70%, indicating a balanced approach between debt and equity financing. However, return on equity is negative due to negative net income, highlighting profitability concerns. Overall, the company maintains a stable asset base but needs to improve profitability to enhance financial health.

Cash Flow

Roots Corporation's cash flow statement demonstrates a strong operating cash flow to net income ratio of 0.84 in TTM, indicating efficient cash generation relative to earnings. However, free cash flow growth has declined by 20.96% from the previous period, suggesting challenges in maintaining cash reserves. The free cash flow to net income ratio is positive, highlighting the company's ability to generate cash despite negative net income, which is a positive sign for liquidity management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	265.44M	262.92M	262.67M	272.12M	273.83M	240.51M
Gross Profit	159.60M	157.13M	152.46M	156.98M	162.86M	139.74M
EBITDA	-5.92M	-6.68M	41.92M	47.38M	69.44M	62.33M
Net Income	-32.46M	-33.44M	1.84M	6.69M	22.76M	13.08M
Balance Sheet
Total Assets	296.53M	329.04M	369.86M	391.89M	393.70M	390.32M
Cash, Cash Equivalents and Short-Term Investments	5.91M	34.02M	28.03M	31.92M	34.16M	9.17M
Total Debt	110.94M	119.88M	124.88M	137.16M	148.92M	172.27M
Total Liabilities	149.18M	169.51M	179.04M	203.85M	207.65M	226.14M
Stockholders Equity	147.36M	159.53M	190.82M	188.04M	186.06M	164.18M
Cash Flow
Free Cash Flow	20.26M	25.63M	33.86M	22.95M	52.06M	47.50M
Operating Cash Flow	27.15M	32.33M	38.70M	29.30M	56.47M	50.92M
Investing Cash Flow	-6.89M	-6.70M	-5.13M	-6.35M	-4.41M	-3.96M
Financing Cash Flow	-26.76M	-19.64M	-37.45M	-25.19M	-27.06M	-31.52M

Roots Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.24
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ROOT, the sentiment is Negative. The current price of 3.24 is above the 20-day moving average (MA) of 3.16, above the 50-day MA of 3.13, and above the 200-day MA of 2.66, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.10 is Neutral, neither overbought nor oversold. The STOCH value of 58.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ROOT.

Roots Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$17.96B	13.14	-5.29%	3.00%	1.25%	-13.95%
ROOT	61 Neutral	C$130.74M	30.45	-19.69%	―	2.63%	-3376.73%
DLMAF	―	$37.20B	41.66	94.57%	0.21%	―	―
RET	61 Neutral	C$102.65M	28.42	1.29%	―	-3.33%	-78.69%
GOOS	―	$1.27B	39.29	11.35%	―	―	―
ATZAF	―	$5.89B	41.65	23.27%	―	―	―
RTMAF	―	$74.34M	23.67	1.49%	―	―	―

Roots Corporation Corporate Events

Roots Corporation Announces Board Changes and Meeting Outcomes

Roots Corporation announced the results of its Fiscal 2024 Annual and Special Meeting of Shareholders, highlighting the election of new board members and the reappointment of KPMG LLP as auditors. The inclusion of Scott Cameron and Edward Kernaghan to the board is expected to enhance Roots’ strategic direction, particularly in global expansion and capital markets expertise, reflecting a promising future for the company.

The most recent analyst rating on (TSE:ROOT) stock is a Buy with a C$3.25 price target. To see the full list of analyst forecasts on Roots Corporation stock, see the TSE:ROOT Stock Forecast page.

Roots Corporation Reports Strong Q1 Fiscal 2025 Results

Roots Corporation reported strong financial results for the first quarter of fiscal 2025, with a 6.7% increase in total sales to $40 million and a notable 10.2% rise in direct-to-consumer sales. The company achieved its third consecutive quarter of year-over-year growth in sales, gross margin, and adjusted EBITDA, driven by strategic initiatives such as enhanced marketing, improved product availability, and AI-driven operational enhancements. Despite a net loss of $7.9 million, the company showed improvement from the previous year, and its strong balance sheet positions it well to adapt to changing market conditions.

The most recent analyst rating on (TSE:ROOT) stock is a Buy with a C$3.25 price target. To see the full list of analyst forecasts on Roots Corporation stock, see the TSE:ROOT Stock Forecast page.