Analyzing Roadzen (NASDAQ:RDZN) & Root (NASDAQ:ROOT)

Roadzen (NASDAQ:RDZN) and Root (NASDAQ:ROOT) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.

Insider & Institutional Ownership

24.7% of Roadzen shares are held by institutional investors. Comparatively, 59.8% of Root shares are held by institutional investors. 29.5% of Roadzen shares are held by company insiders. Comparatively, 12.0% of Root shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Roadzen and Root”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Roadzen	$44.30 million	3.15	-$72.87 million	($0.20)	-8.75
Root	$1.52 billion	0.56	$40.30 million	$3.34	16.06

Root has higher revenue and earnings than Roadzen. Roadzen is trading at a lower price-to-earnings ratio than Root, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Roadzen has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Root has a beta of 2.95, suggesting that its share price is 195% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Roadzen and Root, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Roadzen	1	0	0	0	1.00
Root	1	4	2	0	2.14

Root has a consensus price target of $93.20, indicating a potential upside of 73.78%. Given Root’s stronger consensus rating and higher possible upside, analysts clearly believe Root is more favorable than Roadzen.

Profitability

This table compares Roadzen and Root’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Roadzen	-30.61%	N/A	-40.70%
Root	3.58%	19.97%	3.39%

Summary

Root beats Roadzen on 12 of the 14 factors compared between the two stocks.

About Roadzen

Roadzen, Inc., an insurtech company, provides various insurance products in the United States and internationally. It offers insurance as a service platform, including Via, which enables fleets, carmakers, and insurers to inspect a vehicle using computer vision; Global Distribution Network that enables the configuration, customer quote, payment, and administration of any insurance policy with any insurance carrier as the underwriter; xClaim, which enables digital, touchless, and real-time resolution of claims; StrandD, a digital, real-time dispatch, and tracking for roadside assistance and first notice of loss during accident claims; Good Driving that enables insurers and fleets to recognize drivers, train drivers, and build usage based insurance programs; and Drivebuddy AI, which provides driver-assistance capabilities. The company also provides insurance distribution platform that enables product creation and underwriting, re-insurer backing, and API exchange; and distribution, pre-inspection assistance, telematics, and roadside assistance. In addition, it offers insurance broker services. Roadzen, Inc. was founded in 2015 and is based in Burlingame, California.

About Root

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.