12 Best Performing Small Cap Stocks So Far in 2025

9. Root Inc. (NASDAQ:ROOT)

Number of Hedge Fund Holders: 16

Year-to-Date Performance as of February 17: 78.18%

Root Inc. (NASDAQ:ROOT) offers auto, home, and renters insurance in the US. It operates through a direct-to-consumer model, primarily via mobile app and website. It also utilizes digital, media, referral, and agency distribution channels.

The company achieved profitability in Q3 2024, which was driven by strong underwriting and efficient expense management. It reported $23 million in net income. Its data-driven approach led to an industry-leading 57% gross loss ratio, which allowed it to consider rate reductions in certain markets. The company’s partnerships channel also doubled year-over-year. These factors together fueled a surge in its stock price.

In mid-February, its stock reached a new 52-week high, outperforming the finance sector and insurance industry. Root Inc. (NASDAQ:ROOT) is now focused on continued growth through geographic expansion and reinvestment of profits into marketing and new partnerships. It’s seeing positive trends in customer retention and plans to maintain its disciplined approach to underwriting and innovation.