We recently published an article titled Why These 15 Insurance Stocks Are Skyrocketing So Far In 2025. In this article, we are going to take a look at where Root, Inc. (NASDAQ:ROOT) stands against the other insurance stocks.
Insurance stocks are back in the spotlight after Berkshire Hathaway’s annual shareholder report for 2024. These stocks are not only benefiting from stable cash flows, but they are also benefiting from higher investment yields and premium growth as inflation trends have benefited insurers.
Moreover, AI and tech innovations are starting to spill over into many other industries, which include insurance. It is also benefiting from a demographic tailwind as the growing “silver segment” requires more life and health insurance.
As such, it is worth looking into some of the top performers in this industry. There are good reasons behind each of the stocks’ uptrends.
Insurance house, car and family health live concept. The insurance agent presents the toys that symbolize the coverage.
Methodology
For this article, I screened the top-performing defense stocks year-to-date. Stocks that I have covered recently will be excluded from this list.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An experienced insurance agent explaining the benefits of an insurance product to a customer.
Root, Inc. (NASDAQ:ROOT)
Number of Hedge Fund Holders In Q4 2024: 16
Root, Inc. (NASDAQ:ROOT) is a tech-driven insurance company.
The stock is up significantly so far in 2025 as it successfully refinanced its $300 million term loan facility with BlackRock late last year. This reduced its principal to $200 million and lowered interest rates by 300 basis points (to SOFR + 600 basis points). This move is expected to cut interest expenses by approximately 50% on a run-rate basis.
Moreover, Root, Inc. (NASDAQ:ROOT) expanded its auto insurance services to Minnesota in January 2025. It increased its coverage to over 77% of the U.S. population and has benefited from broader market momentum.
Investors are optimistic about its Q4 2024 earnings release on February 26, 2025.
The consensus price target of $75 implies 25.16% downside.
Root, Inc. (NASDAQ:ROOT) is up 38.04% year-to-date.
Overall ROOT ranks 1st on our list of the insurance stocks that are skyrocketing so far in 2025. While we acknowledge the potential of ROOT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ROOT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.