Roots Corporation (ROOT) AI Stock Analysis

• Market Cap: C$129.93M
• Dividend Yield: N/A
• Average Volume (3M): 8.19K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.27
• Revenue Growth: 4.47%
• EPS Growth: -3217.53%
• Country: CA
• Employees: 1,788
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): -0.11
• Shares Outstanding: 39,612,500
• 10 Day Avg. Volume: 3,431
• 30 Day Avg. Volume: 8,192
• PEG Ratio: <0.01
• Price to Book (P/B): 0.61
• Price to Sales (P/S): 0.37
• P/FCF Ratio: 3.80
• 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$4.00
• Price Target Upside: 25.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: C$3.50 ▲(10.06% Upside)

Roots Corporation's overall stock score is driven by a positive outlook from the earnings call, which highlights strong sales growth and strategic advancements. However, profitability challenges and a negative P/E ratio weigh down the score. Technical indicators suggest a neutral market stance, while financial performance shows moderate stability but requires improvement in profitability.

Roots Corporation Business Overview & Revenue Model

Company Description

Roots Corporation (ROOT) is a Canadian lifestyle brand that specializes in high-quality apparel, leather goods, and accessories inspired by the outdoors and Canadian heritage. Founded in 1973, the company operates in the retail sector, offering a wide range of products including clothing for men, women, and children, as well as footwear and home products. Roots is known for its commitment to craftsmanship and sustainability, with a focus on creating durable products that resonate with consumers who value both style and functionality.

How the Company Makes Money

Roots Corporation generates revenue primarily through its retail and e-commerce channels. The company sells its products directly to consumers through a network of branded retail stores across Canada and in select international markets, supplemented by its online platform, which allows for broader reach and convenience. Key revenue streams include sales of apparel, leather goods, and accessories. Additionally, Roots benefits from strategic partnerships that enhance its brand visibility and product offerings, such as collaborations with other fashion and lifestyle brands. The company's focus on seasonal collections and limited-edition products also helps drive consumer interest and sales, contributing to its overall earnings.

Roots Corporation Financial Statement Overview

Summary

Roots Corporation faces profitability challenges with a negative net profit margin and EBIT margin, despite a strong gross profit margin. The balance sheet shows moderate leverage but a concerning negative return on equity. Cash flow trends are slightly positive, with growth in free cash flow, but profitability issues need addressing.

Income Statement

Roots Corporation's income statement shows a mixed performance. The TTM data indicates a slight revenue growth of 1.14%, but the company is struggling with profitability, as evidenced by a negative net profit margin of -12.23% and a negative EBIT margin of -13.25%. The gross profit margin remains healthy at 60.13%, suggesting efficient cost management at the production level. However, the negative EBITDA margin highlights challenges in covering operating expenses.

Balance Sheet

The balance sheet reflects moderate financial stability. The debt-to-equity ratio of 0.75 indicates a balanced approach to leveraging, but the negative return on equity of -19.55% suggests that the company is not generating sufficient returns on shareholders' equity. The equity ratio stands at 47.29%, indicating a reasonable proportion of equity financing relative to total assets.

Cash Flow

Cash flow analysis reveals some positive trends, with a free cash flow growth rate of 8.11% in the TTM period. The operating cash flow to net income ratio is 0.53, indicating that operating cash flows are covering net income. However, the free cash flow to net income ratio of 0.75 suggests that while free cash flow is positive, it is not fully covering the net losses.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	268.46M	262.92M	262.67M	272.12M	273.83M	240.51M
Gross Profit	163.51M	157.13M	152.46M	156.98M	162.86M	139.74M
EBITDA	-9.32M	-6.68M	41.92M	47.38M	69.44M	62.33M
Net Income	-31.62M	-33.44M	1.84M	6.69M	22.76M	13.08M
Balance Sheet
Total Assets	299.46M	329.04M	369.86M	391.89M	393.70M	390.32M
Cash, Cash Equivalents and Short-Term Investments	1.93M	34.02M	28.03M	31.92M	34.16M	9.17M
Total Debt	111.70M	119.88M	124.88M	137.16M	148.92M	172.27M
Total Liabilities	157.86M	169.51M	179.04M	203.85M	207.65M	226.14M
Stockholders Equity	141.60M	159.53M	190.82M	188.04M	186.06M	164.18M
Cash Flow
Free Cash Flow	21.90M	25.63M	33.86M	22.95M	52.06M	47.50M
Operating Cash Flow	28.49M	32.33M	38.70M	29.30M	56.47M	50.92M
Investing Cash Flow	-6.60M	-6.70M	-5.13M	-6.35M	-4.41M	-3.96M
Financing Cash Flow	-25.42M	-19.64M	-37.45M	-25.19M	-27.06M	-31.52M

Roots Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.18
• 50DMA: Negative
• 100DMA: Negative
• 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 3.18 is below the 20-day moving average (MA) of 3.26, below the 50-day MA of 3.27, and above the 200-day MA of 2.91, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 43.06 is Neutral, neither overbought nor oversold. The STOCH value of 55.56 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
ATZ	79 Outperform	$11.19B	37.88	26.49%	―	26.51%	172.52%
DOL	70 Outperform	$49.93B	40.18	94.57%	0.22%	9.91%	16.96%
GOOS	65 Neutral	$1.94B	35.38	6.07%	―	3.78%	-54.87%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
RET	61 Neutral	C$106.77M	133.44	0.35%	―	-3.57%	-95.88%
RET.A	56 Neutral	C$105.09M	127.61	0.52%	―	-3.57%	-95.88%
ROOT	55 Neutral	C$129.93M	-4.19	-19.83%	―	4.47%	-3217.53%

Roots Corporation Corporate Events

Roots Corp’s Earnings Call Highlights Strong Growth

Roots Corp’s recent earnings call painted a picture of a company on a positive financial trajectory, with strong performance in several key areas. The sentiment was largely upbeat, driven by significant sales growth, successful product launches, and effective brand collaborations. Despite some challenges with partner sales and increased expenses, the overall outlook remains optimistic.

Roots Corporation Reports Robust Q2 2025 Financial Results

Roots Corporation reported strong financial results for the second quarter of fiscal 2025, with a 6.3% increase in total sales to $50.8 million and a notable 12.7% rise in direct-to-consumer sales. The company achieved a 17.8% growth in comparable sales, driven by brand strength and customer engagement, and improved its net loss by 16.1% compared to the previous year. This marks the fourth consecutive quarter of growth in sales, gross margins, and adjusted EBITDA, reflecting positive momentum and strategic investments aimed at sustainable, profitable growth.

The most recent analyst rating on (TSE:ROOT) stock is a Hold with a C$3.50 price target. To see the full list of analyst forecasts on Roots Corporation stock, see the TSE:ROOT Stock Forecast page.