Chicago, IL – March 10, 2025 – Zacks Equity Research shares Root ROOT as the Bull of the Day and Builders FirstSource BLDR as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Vermilion Energy Inc. VET, Chord Energy Corp. CHRD and Viper Energy, Inc. VNOM.
Here is a synopsis of all five stocks:
Root is a Zack Rank #1 (Strong Buy) that is an insurance company that primarily provides automobile and renters insurance. The company operates with a direct-to-consumer model, meaning they sell policies directly to customers rather than relying on traditional insurance agents.
The stock is surging after a strong earnings beat and upbeat guidance, with analysts boosting estimates.
Root is valued at approximately $2 billion and employs over 1,000 people. It was founded in 2015 and headquartered in Columbus, Ohio.
The company distributes their insurance through digital media, independent agents, referrals, and partnerships, expanding beyond just their app and website. Customers can access their services via mobile apps and their website, making the experience more digital-first.
The stock has a Zacks Style Score of "A" in Growth and Momentum. However, ROOT has a "D" rating in Value.
Root delivered a massive Q4 earnings beat, surprising to the upside by 306%. This was the thirteenth beat in a row, which followed last quarter's 321% beat.
Q4 Revenue surged 67.7% YoY to $326.7 million, exceeding estimates of $291 million. Gross premiums written rose 18%, and policies in force increased 21% YoY.
Most notably, Root posted its second consecutive quarter of profitability, with $31 million in net income for the full year, a $178 million improvement over last year.
Root credited its success to disciplined underwriting and a data-driven, direct-to-consumer model that optimizes loss ratios. The company now boasts one of the best loss ratios in the industry and continues to scale efficiently.
There are not a lot of analysts covering the stock yet, but that will likely change soon. Those that are covering ROOT, are lifting their estimates in a big way.
For the current year, estimates have jumped from -$1.77 to -$0.29. Since EPS, the numbers were taken from -$0.72 to -$0.29.
For the next year, analysts see earnings swinging into the black. Over the last 60 days, these numbers have gone from $0.50 to $0.65, a move of 30%.
After earnings, Wells Fargo analyst Elyse Greenspan maintained Root with a Equal-Weight, but raised the price target from $80 to $97.
Since early 2024 the bulls have been on a rampage in this name, taking the stock from $7 last February to $145 last week. So far in 2025, the stock has almost doubled.
Despite the recent market weakness, this has been one of the strongest performers out there. While investors might understandably want to chase the performance, the stock could be ripe to buy on any pullback.
Let's take a look at some levels investors can target:
21-day: $119
50-day: $97.50
200-day: $68
Post EPS Fibonacci buy zone (50%-61.8% retracements): $112-117
Upside Fibonacci targets (161.8% extension): $172
Root's impressive earnings momentum, fueled by disciplined underwriting and a cutting-edge digital model, has positioned it as a rising force in the Insurtech space.
With back-to-back profitable quarters, surging revenue, and analysts raising estimates, the company is proving its ability to scale efficiently while maintaining industry-leading loss ratios.
The stock's explosive momentum signals strong investor confidence, and with further growth on the horizon, Root remains a compelling opportunity for investors looking for a small cap growth name.
Builders FirstSource is a Zacks Rank #5 (Strong Sell) that is a leading supplier of building materials and manufactured components for residential and commercial construction. The company provides a wide range of products, including lumber, drywall, windows, doors, trusses, and roofing materials, as well as offering services like custom-designed building components.
The company faces headwinds from a slowdown in the housing market, higher commodity prices, and potential labor and supply chain issues. Economic uncertainty and inflationary pressures also pose risks to demand for building materials.
The stock has dropped 35% from it's all-time highs, reflecting the above factors, as investors have been selling amid declining analyst estimates.
Builders FirstSource was incorporated in 1998 and employs 29,000. The company operates throughout the United States, serving both professional contractors and do-it-yourself (DIY) customers. They are also involved in manufacturing certain components for the construction industry, making them a significant player in the supply chain for construction projects.
BLDR is valued at $15 billion and has a Forward PE of 14. The stock holds Zacks Style Scores of "C" in Growth, but "D" in Momentum. It has an "B" in Value with a Forward PE at 14.
Builders FirstSource delivered a mixed Q4, beating EPS by 3%, but revenue fell short of the $3.91 billion expected. The company continues to navigate market headwinds, including affordability pressures on single-family housing starts and a sluggish multifamily sector.
Adjusted EBITDA declined 28% year-over-year to $494 million, with margins contracting by 360 basis points to 12.9%.
Looking ahead, BLDR is guiding for 2025 revenue of $16.5–$17.5 billion, slightly below consensus estimates of $17.4 billion, with gross margins expected to normalize in the 30–32% range.
Since reporting earnings, estimate have fallen off a cliff.
For the current quarter, numbers have dropped 28%, from $1.90 to $1.36.
Looking at the current year, estimates have declined 18% in that same period, down from $11.65 to $9.55.
For the next year, projections have been adjusted downward by 25% over the last two months, now at $11.12 from $14.73.
The stock is trading at 2025 lows, down about 7% on the year and 23% off the highs. The stock is trading below all moving averages, with the 50-day MA at $151 and 200-day MA at $164.
The 2024 lows at $130.75 look to be tested soon and if selling takes hold under that $130 level, investors need to brace themselves for risk down to the $100 level.
Builders FirstSource is facing significant challenges as declining earnings estimates, market headwinds, and technical weakness weigh on the stock.
With shares trading near 2024 lows and further downside risk if key support levels break, investors may want to exercise caution until the housing market stabilizes and earnings trends improve.
Volatility returned to Wall Street at the beginning of the year, with multiple factors denting investors' sentiment. Rising inflation, resulting in a halt in rate cuts by the Federal Reserve and growing fears of a trade war following President Donald Trump's announcement of hefty tariffs on several countries have been rattling stocks.
The volatility could escalate in the coming days, as uncertainty over the economy's health continues to grow. Given this situation, investors looking for a steady income and ways to protect their capital may want to hold or buy dividend-paying stocks. Three such stocks are Vermilion Energy Inc., Chord Energy Corp. and Viper Energy, Inc.
An unexpected rise in inflation over the past three months has raised concerns of a slowing economy, with major indexes retreating from their earlier highs seen in 2024. The Federal Reserve issued an alert in late 2024 that there will be fewer rate cuts this year as inflation has shown signs of escalating.
The Fed left interest rates unchanged in January and has hinted at adopting a cautious approach till inflation shows signs of cooling. Market participants now believe that the Federal Reserve wouldn't go for a rate cut before the second half of the year. Moreover, it is unlikely that the Fed will go for more than one rate cut this year.
To make matters worse, Trump's proposed tariffs have raised fears of a trade war. Trump has announced 25% tariffs on Canadian and Mexican imports before temporarily pausing them for the second time earlier this week. Both nations have also announced retaliatory tariffs if Trump's tariffs go into effect.
Besides, Trump has already imposed 10% tariffs on Chinese goods, with Beijing having already retaliated. The ongoing tensions could keep markets volatile for a longer period.
Given the present circumstances, investing in stocks that pay out dividends could be a smart choice. Such companies usually remain stable, consistently distributing dividends while sustaining profitability through strong business strategies. In a fluctuating market, companies that provide significant dividend payments often outperform those that do not.
Vermilion Energy Inc. is an international oil and gas producer with properties in Western Canada, Australia, France and the Netherlands. VET has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here
On March 6, Vermilion Energyannounced that its shareholders would receive a dividend of $0.09 a share on April 15. VET has a dividend yield of 4.41%. Over the past five years, Vermilion Energyhas increased its dividend nine times, and its payout ratio at present sits at 43% of earnings. Check Vermilion Energy's dividend history here.
Chord Energy Corp. is an independent exploration and production company with its long-lived assets in the Williston Basin. CHRD, formerly known as Oasis Petroleum Inc., is headquartered in Houston. Chord Energy has a Zacks Rank #3.
On March 6, Chord Energy Corporation declared that its shareholders would receive a dividend of $1.30 a share on March 26. CHRD has a dividend yield of 4.93%. Over the past five years, Chord Energy Corporation has increased its dividend nine times, and its payout ratio at present sits at 30% of earnings. Check Chord Energy Corporation's dividend history here.
Viper Energy, Inc. is a subsidiary of independent oil & gas exploration and production company — Diamondback Energy. VNOM has mineral interests in prolific oil-rich shale plays like the Eagle Ford and Permian Basin. Viper Energy carries a Zacks Rank #3.
On March 6, Viper Energy announced that its shareholders would receive a dividend of $0.65 a share on March 13. VNOM has a dividend yield of 2.79%. Over the past five years, Viper Energyhas increased its dividend 14 times, and its payout ratio at present sits at 59% of earnings. Check Viper Energy's dividend history here.
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Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report
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Chord Energy Corporation (CHRD) : Free Stock Analysis Report
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