Root reported better-than-expected Q3 results, with revenue of $387.8 million (26.9% YoY growth) and adjusted EPS of -$0.34, beating analyst estimates. The company credited growth to new pricing algorithms, expansion into new states, and strong underwriting results, despite a drop in operating margin to 0.1%. Analyst questions focused on drivers of growth in direct and partnership channels, severity upticks, and pricing strategies. Looking ahead, Root will focus on scaling the partnership channel, pricing technology investments, and managing loss ratio volatility. Stock currently trades at $85.90.
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