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Roots Corp
TSX:ROOT

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Roots Corp Logo
Roots Corp
TSX:ROOT
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Price: 2.27 CAD Market Closed
Updated: Mar 29, 2024

Intrinsic Value

Roots Corp. engages in the provision of leather goods, apparel, and accessories. [ Read More ]

The intrinsic value of one ROOT stock under the Base Case scenario is 8.82 CAD. Compared to the current market price of 2.27 CAD, Roots Corp is Undervalued by 74%.

Key Points:
ROOT Intrinsic Value
Base Case
8.82 CAD
Undervaluation 74%
Intrinsic Value
Price
Worst Case
Base Case
Best Case

Valuation Backtest
Roots Corp

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Fundamental Analysis

Activewear Strong but Overall Sales Dip 9%
2024-Q3 Earnings Call

Activewear Strong but Overall Sales Dip 9%

In Q3, sales fell 9% to $63.5 million, with an 8.2% decrease in direct-to-consumer (DTC) sales. Full price DTC sales, however, grew 3%, amid lower off-price sales and promotional discipline. Activewear outperformed significantly, surging over 50%. New collaborations, like the Asian-focused CLOT line, are attracting customers globally, contributing to a positive performance. U.S. online sales saw double-digit growth due to enhanced operational capabilities, such as Canadian stores directly shipping to U.S. customers. Gross profit margin improved to 58.4%, driven by lower freight costs and a higher mix of full price sales. Net income dropped to $519,000 from $2.2 million year-over-year, reflecting a cautious stance amidst economic uncertainty.

Financials

Balance Sheet Decomposition
Roots Corp

Current Assets 78.9m
Cash & Short-Term Investments 4.6m
Receivables 7.1m
Other Current Assets 67.2m
Non-Current Assets 292.5m
PP&E 99.8m
Intangibles 192.4m
Other Non-Current Assets 300k
Current Liabilities 62.3m
Accounts Payable 30.6m
Other Current Liabilities 31.7m
Non-Current Liabilities 132.5m
Long-Term Debt 112.1m
Other Non-Current Liabilities 20.4m
Efficiency

Earnings Waterfall
Roots Corp

Revenue
265.9m CAD
Cost of Revenue
-113.9m CAD
Gross Profit
152m CAD
Operating Expenses
-142m CAD
Operating Income
10m CAD
Other Expenses
-9.8m CAD
Net Income
200k CAD

Free Cash Flow Analysis
Roots Corp

Last Value
3-Years Average
FCF Margin
Conversion Rate
History
Components
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Table
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Fundamental Scores

ROOT Profitability Score
Profitability Due Diligence

Roots Corp's profitability score is 50/100. The higher the profitability score, the more profitable the company is.

Positive Gross Profit
Positive Free Cash Flow
Positive Operating Income
Positive Revenue Growth Forecast
50/100
Profitability
Score

Roots Corp's profitability score is 50/100. The higher the profitability score, the more profitable the company is.

ROOT Solvency Score
Solvency Due Diligence

Roots Corp's solvency score is 33/100. The higher the solvency score, the more solvent the company is.

Low D/E
Long-Term Solvency
Short-Term Solvency
Low Altman Z-Score
33/100
Solvency
Score

Roots Corp's solvency score is 33/100. The higher the solvency score, the more solvent the company is.

Wall St
Price Targets

ROOT Price Targets Summary
Roots Corp

Wall Street analysts forecast ROOT stock price to rise over the next 12 months.

According to Wall Street analysts, the average 1-year price target for ROOT is 3.25 CAD .

Lowest
Price Target
Not Available
Average
Price Target
3.25 CAD
43% Upside
Highest
Price Target
Not Available
View Analyst Estimates
View Analyst Estimates

Competitive Landscape

Shareholder Return

ROOT Price
Roots Corp

1M 1M
-4%
6M 6M
-16%
1Y 1Y
-22%
3Y 3Y
-27%
5Y 5Y
-44%
10Y 10Y
-77%
Annual Price Range
2.27
52w Low
2.27
52w High
3.24
Price Metrics
Average Annual Return -3.05%
Standard Deviation of Annual Returns 36.99%
Max Drawdown -87%
Shares Statistics
Market Capitalization 91.5m CAD
Shares Outstanding 40 250 213
Percentage of Shares Shorted 1.4%

ROOT Return Decomposition
Main factors of price return

What is price return decomposition?

Company Profile

Roots Corp Logo
Roots Corp

Country

Canada

Industry

Retail

Market Cap

91.5m CAD

Dividend Yield

0%

Description

Roots Corp. engages in the provision of leather goods, apparel, and accessories. The company is headquartered in Toronto, Ontario and currently employs 2,044 full-time employees. The company went IPO on 2017-10-24. The firm offers a range of products, including women’s and men’s apparel, leather goods, footwear, accessories, and kids, toddler and baby apparel. The Company’s segments include Direct-to-Consumer and Partners and Other segment. The Direct-to-Consumer segment comprises sales through corporate retail stores and electronic commerce. The Partners and Other segment consist primarily of the wholesale of Roots-branded products to its international operating partner and the royalties earned on the retail sales of Roots-branded products by its partner. The firm operates approximately 100 retail stores across Canada, two in the United States and ship to more than 60 countries worldwide through its roots.com, the Company's electronic Commerce platform. The company also has approximately 100 partner operated stores and sell its products through third-party retail sites in Asia.

Contact

ONTARIO
TORONTO
1400 Castlefield Avenue
+14167813574.0
https://www.roots.com/ca/en/homepage

IPO

2017-10-24

Employees

2 044

Officers

President, CEO & Director
Ms. Meghan Roach
Chief Financial Officer
Mr. Leon Wu
Chief Product Officer
Ms. Karuna Scheinfeld
Vice President of Operations
Mr. Joseph Mangatoor
Senior VP, General Counsel & Corporate Secretary
Mr. Kaleb Honsberger
Chief Marketing Officer
Ms. Leslie Golts
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Senior Vice President of Human Resources
Ms. Michelle Lettner
Senior Vice President of Information Strategy & Systems
Mr. Ron Ijack
Show Less

See Also

Discover More
What is the Intrinsic Value of one ROOT stock?

The intrinsic value of one ROOT stock under the Base Case scenario is 8.82 CAD.

Is ROOT stock undervalued or overvalued?

Compared to the current market price of 2.27 CAD, Roots Corp is Undervalued by 74%.