(ROOT) Roots - Ratings and Ratios

Roots Corporation, a Canadian heritage brand established in 1973, specializes in designing, marketing, and distributing premium apparel, leather goods, footwear, and accessories under the Roots brand. The company operates through two core business segments: Direct-To-Consumer and Partners and Other. The Direct-To-Consumer segment encompasses sales through corporate retail stores and e-commerce platforms, while the Partners and Other segment focuses on wholesale operations, supplying Roots-branded products to international partners, licensees, and wholesale customers. Headquartered in Toronto, Canada, Roots has built a reputation for its high-quality, timeless designs that resonate with both domestic and international markets.

From a technical standpoint, ROOT is currently trading at CAD 2.40, slightly below its SMA 20 of 2.52 but above its SMA 50 of 2.36 and SMA 200 of 2.17. The average trading volume over the past 20 days is 7,400 shares, with an ATR of 0.06, indicating relatively low volatility. On the fundamental side, the company has a market capitalization of CAD 103.04 million, with a trailing P/E of 42.67 and a forward P/E of 7.00, suggesting expected earnings growth. The P/B ratio of 0.58 and P/S ratio of 0.40 indicate undervaluation relative to book value and sales, respectively. However, the return on equity (RoE) of 1.60% reflects modest profitability compared to equity.

3-Month Forecast: Based on the convergence of technical and fundamental data, ROOT is expected to trade in a narrow range with potential upside driven by improving earnings visibility. The stocks SMA 20 crossing above the SMA 50 suggests short-term bullish momentum, while the low ATR signals limited volatility. Fundamentally, the forward P/E of 7.00 implies investor expectations of improved financial performance, which could drive upward price movement if realized. However, the current P/E of 42.67 and low RoE may act as headwinds, potentially limiting near-term gains. Overall, ROOT is likely to see modest appreciation over the next three months, supported by its undervalued metrics and stabilizing technical indicators.