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Roots

TSX:ROOT
Snowflake Description

Reasonable growth potential and fair value.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ROOT
TSX
CA$86M
Market Cap
  1. Home
  2. CA
  3. Retail
Company description

Roots Corporation, together with its subsidiaries, provides women’s, men’s, kids, toddler, and baby apparel; leather goods; footwear; and accessories under the Roots brand. The last earnings update was 64 days ago. More info.


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  • Roots has significant price volatility in the past 3 months.
ROOT Share Price and Events
7 Day Returns
4.1%
TSX:ROOT
-0.7%
CA Specialty Retail
1.1%
CA Market
1 Year Returns
-52.1%
TSX:ROOT
-20.7%
CA Specialty Retail
6.9%
CA Market
ROOT Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Roots (ROOT) 4.1% 0.5% -34% -52.1% - -
CA Specialty Retail -0.7% -2.9% -6.6% -20.7% -28.7% -39.4%
CA Market 1.1% 2.6% 4.6% 6.9% 8% 8.6%
1 Year Return vs Industry and Market
  • ROOT underperformed the Specialty Retail industry which returned -20.7% over the past year.
  • ROOT underperformed the Market in Canada which returned 6.9% over the past year.
Price Volatility
ROOT
Industry
5yr Volatility vs Market

ROOT Value

 Is Roots undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Roots to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Roots.

TSX:ROOT Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 8 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 13.9%
Perpetual Growth Rate 10-Year CA Government Bond Rate 1.9%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for TSX:ROOT
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year CA Govt Bond Rate 1.9%
Equity Risk Premium S&P Global 6%
Specialty Retail Unlevered Beta Simply Wall St/ S&P Global 0.85
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.855 (1 + (1- 26.5%) (338.88%))
2.329
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
2
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.95% + (2 * 5.96%)
13.87%

Discounted Cash Flow Calculation for TSX:ROOT using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Roots is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

TSX:ROOT DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (CAD, Millions) Source Present Value
Discounted (@ 13.87%)
2020 -2.84 Analyst x3 -2.49
2021 13.44 Analyst x3 10.37
2022 24.76 Est @ 84.22% 16.77
2023 39.51 Est @ 59.54% 23.50
2024 56.20 Est @ 42.26% 29.36
2025 73.16 Est @ 30.17% 33.56
2026 89.04 Est @ 21.7% 35.87
2027 103.08 Est @ 15.78% 36.47
2028 115.07 Est @ 11.63% 35.76
2029 125.10 Est @ 8.72% 34.14
Present value of next 10 years cash flows CA$253.00
TSX:ROOT DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= CA$125.10 × (1 + 1.95%) ÷ (13.87% – 1.95%)
CA$1,069.95
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= CA$1,069.95 ÷ (1 + 13.87%)10
CA$292.00
TSX:ROOT Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= CA$253.00 + CA$292.00
CA$545.00
Equity Value per Share
(CAD)
= Total value / Shares Outstanding
= CA$545.00 / 42.12
CA$12.94
TSX:ROOT Discount to Share Price
Calculation Result
Value per share (CAD) From above. CA$12.94
Current discount Discount to share price of CA$2.04
= -1 x (CA$2.04 - CA$12.94) / CA$12.94
84.2%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Roots is available for.
Intrinsic value
>50%
Share price is CA$2.04 vs Future cash flow value of CA$12.94
Current Discount Checks
For Roots to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Roots's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Roots's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Roots's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Roots's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
TSX:ROOT PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-08-03) in CAD CA$0.04
TSX:ROOT Share Price ** TSX (2019-11-13) in CAD CA$2.04
Canada Specialty Retail Industry PE Ratio Median Figure of 6 Publicly-Listed Specialty Retail Companies 12.94x
Canada Market PE Ratio Median Figure of 517 Publicly-Listed Companies 14.43x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Roots.

TSX:ROOT PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= TSX:ROOT Share Price ÷ EPS (both in CAD)

= 2.04 ÷ 0.04

52.08x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Roots is overvalued based on earnings compared to the CA Specialty Retail industry average.
  • Roots is overvalued based on earnings compared to the Canada market.
Price based on expected Growth
Does Roots's expected growth come at a high price?
Raw Data
TSX:ROOT PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 52.08x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 8 Analysts
29.6%per year
North America Specialty Retail Industry PEG Ratio Median Figure of 49 Publicly-Listed Specialty Retail Companies 2.17x
Canada Market PEG Ratio Median Figure of 234 Publicly-Listed Companies 1.04x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to calculate PEG ratio for Roots, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Roots's assets?
Raw Data
TSX:ROOT PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-08-03) in CAD CA$4.63
TSX:ROOT Share Price * TSX (2019-11-13) in CAD CA$2.04
Canada Specialty Retail Industry PB Ratio Median Figure of 13 Publicly-Listed Specialty Retail Companies 1.31x
Canada Market PB Ratio Median Figure of 2,288 Publicly-Listed Companies 1.28x
TSX:ROOT PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= TSX:ROOT Share Price ÷ Book Value per Share (both in CAD)

= 2.04 ÷ 4.63

0.44x

* Primary Listing of Roots.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Roots is good value based on assets compared to the CA Specialty Retail industry average.
X
Value checks
We assess Roots's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Specialty Retail industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Specialty Retail industry average (and greater than 0)? (1 check)
  5. Roots has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

ROOT Future Performance

 How is Roots expected to perform in the next 1 to 3 years based on estimates from 8 analysts?

  • No analysts cover Roots, future earnings growth has been estimated based on fundamentals.
The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
29.6%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Roots expected to grow at an attractive rate?
  • Roots's earnings growth is expected to exceed the low risk savings rate of 1.9%.
Growth vs Market Checks
  • Roots's earnings growth is expected to exceed the Canada market average.
  • Roots's revenue growth is expected to exceed the Canada market average.
Annual Growth Rates Comparison
Raw Data
TSX:ROOT Future Growth Rates Data Sources
Data Point Source Value (per year)
TSX:ROOT Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 8 Analysts 29.6%
TSX:ROOT Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 8 Analysts 5.4%
Canada Specialty Retail Industry Earnings Growth Rate Market Cap Weighted Average 27.8%
Canada Specialty Retail Industry Revenue Growth Rate Market Cap Weighted Average 4.7%
Canada Market Earnings Growth Rate Market Cap Weighted Average 10.5%
Canada Market Revenue Growth Rate Market Cap Weighted Average 5%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
TSX:ROOT Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 8 Analyst Estimates (S&P Global) See Below
All numbers in CAD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
TSX:ROOT Future Estimates Data
Date (Data in CAD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-01-31 366 33 8
2020-01-31 349 25 8
2019-11-14
TSX:ROOT Past Financials Data
Date (Data in CAD Millions) Revenue Cash Flow Net Income *
2019-08-03 334 28 2
2019-05-04 332 23 7
2019-02-02 329 19 11
2018-11-03 328 16 14
2018-08-04 331 22 16
2018-05-05 329 26 17
2018-02-03 326 30 18
2017-10-28 307 27 14
2017-07-29 297 29 15
2017-04-29 284 34 11
2017-01-28 282 30 8

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Roots's earnings are expected to grow significantly at over 20% yearly.
  • Roots's revenue is expected to grow by 5.4% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
TSX:ROOT Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 8 Analyst Estimates (S&P Global) See Below

All data from Roots Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

TSX:ROOT Future Estimates Data
Date (Data in CAD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-01-31
2020-01-31
2019-11-14
TSX:ROOT Past Financials Data
Date (Data in CAD Millions) EPS *
2019-08-03 0.04
2019-05-04 0.17
2019-02-02 0.27
2018-11-03 0.33
2018-08-04 0.39
2018-05-05 0.41
2018-02-03 0.42
2017-10-28 0.33
2017-07-29 0.08
2017-04-29 3.02
2017-01-28 0.20

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if Roots will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
X
Future performance checks
We assess Roots's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Canada market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Canada market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Roots has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

ROOT Past Performance

  How has Roots performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Roots's growth in the last year to its industry (Specialty Retail).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Roots has delivered over 20% year on year earnings growth in the past 5 years.
  • Roots's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Roots's 1-year earnings growth is negative, it can't be compared to the CA Specialty Retail industry average.
Earnings and Revenue History
Roots's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Roots Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

TSX:ROOT Past Revenue, Cash Flow and Net Income Data
Date (Data in CAD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-08-03 333.84 1.65 162.59
2019-05-04 332.35 7.22 160.57
2019-02-02 329.03 11.40 158.33
2018-11-03 328.23 13.99 153.09
2018-08-04 330.94 16.17 146.84
2018-05-05 328.86 17.02 143.37
2018-02-03 326.06 17.50 139.32
2017-10-28 307.21 13.83 132.74
2017-07-29 296.90 14.76 127.92
2017-04-29 284.45 10.53 123.35
2017-01-28 281.89 8.19 121.22
2016-01-30 184.20 -10.43 63.10

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Roots has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Roots used its assets less efficiently than the CA Specialty Retail industry average last year based on Return on Assets.
  • Roots's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Roots's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Specialty Retail industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Roots has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

ROOT Health

 How is Roots's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Roots's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Roots is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Roots's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Roots's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is not covered by short term assets, assets are 0.5x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Roots Company Filings, last reported 3 months ago.

TSX:ROOT Past Debt and Equity Data
Date (Data in CAD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-08-03 194.89 138.57 0.79
2019-05-04 204.72 112.89 0.50
2019-02-02 214.70 97.42 1.99
2018-11-03 196.36 133.63 0.47
2018-08-04 193.40 121.91 0.38
2018-05-05 195.78 98.20 2.89
2018-02-03 198.97 84.47 1.81
2017-10-28 178.32 123.39 1.03
2017-07-29 171.49 120.97 0.44
2017-04-29 201.18 104.92 25.26
2017-01-28 201.18 104.46 25.26
2016-01-30 192.28 108.02 8.48
  • Roots's level of debt (71.1%) compared to net worth is high (greater than 40%).
  • Unable to establish if Roots's debt level has increased without past 5-year debt data.
  • Debt is not well covered by operating cash flow (19.9%, less than 20% of total debt).
  • Interest payments on debt are not well covered by earnings (EBIT is 1.9x annual interest expense, ideally 3x coverage).
X
Financial health checks
We assess Roots's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Roots has a total score of 1/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

ROOT Dividends

 What is Roots's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Roots dividends.
If you bought CA$2,000 of Roots shares you are expected to receive CA$0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Roots's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate Roots's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
TSX:ROOT Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 8 Analyst Estimates (S&P Global) See Below
Canada Specialty Retail Industry Average Dividend Yield Market Cap Weighted Average of 7 Stocks 3.6%
Canada Market Average Dividend Yield Market Cap Weighted Average of 330 Stocks 3.5%
Canada Minimum Threshold Dividend Yield 10th Percentile 1.2%
Canada Bottom 25% Dividend Yield 25th Percentile 2%
Canada Top 25% Dividend Yield 75th Percentile 5.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

TSX:ROOT Future Dividends Estimate Data
Date (Data in CA$) Dividend per Share (annual) Avg. No. Analysts
2021-01-31
2020-01-31
2019-11-14

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as Roots has not reported any payouts.
  • Unable to verify if Roots's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Roots's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Roots has not reported any payouts.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
X
Income/ dividend checks
We assess Roots's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.2%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Roots afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Roots has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

ROOT Management

 What is the CEO of Roots's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Jim Gabel
COMPENSATION CA$888,922
AGE 56
TENURE AS CEO 3.8 years
CEO Bio

Mr. James Alan Gabel, also known as Jim, has been President, Chief Executive Officer of Roots Corp. since February 2016 and also serves as its Director since October 2017. Mr. Gabel has been the Chief Executive Officer and President at Roots Canada Ltd. since February 24, 2015. He served as the President of the Performance Group at Wolverine World Wide Inc. from June 2014 to February 4, 2016. He has more than 24 years' experience in the footwear and apparel industry. He served as the President of Reebok North America at Reebok International Ltd. since March 2008. He was responsible for all of the region's brand operations, including marketing, product merchandising, sales, finance, operations and owned retail stores. Prior to joining Reebok, he served as Senior Vice President of adidas America, where he was responsible for all brand operations for adidas and TaylorMade-adidas Golf in Canada and for directing the two largest sales accounts teams within the U.S. Prior to this role, he served as the President of adidas Canada Ltd., where he led the Canadian operation to four years of double digit gains. He joined adidas in 2001 as Vice President of Sales & Marketing, adidas Canada. Mr. Gabel held a number of senior executive roles at adidas Group from 2008 to 2014. Before joining the adidas Group, he held senior level positions at Champion Canada and Mizuno Canada. He serves as a Director of Keg Restaurants Ltd. and the Terry Fox Foundation. Mr. Gabel received a Bachelor of Business Administration degree from Wilfrid Laurier University.

CEO Compensation
  • Insufficient data for Jim to compare compensation growth.
  • Jim's remuneration is higher than average for companies of similar size in Canada.
Management Team Tenure

Average tenure of the Roots management team in years:

1
Average Tenure
  • The average tenure for the Roots management team is less than 2 years, this suggests a new team.
Management Team

Jim Gabel

TITLE
President
COMPENSATION
CA$889K
AGE
56
TENURE
3.8 yrs

James Connell

TITLE
Chief e-Commerce & Customer Experience Officer
COMPENSATION
CA$361K
AGE
44
TENURE
1 yrs

Meghan Roach

TITLE
Interim Chief Financial Officer
TENURE
0.3 yrs

Kristen Davies

TITLE
Head of Investor Relations

Kaleb Honsberger

TITLE
VP & General Counsel

Karen Zuccala

TITLE
Vice President of Marketing
TENURE
1 yrs

Michelle Lettner

TITLE
Vice President of Human Resources

Nancy Lepler

TITLE
Chief Merchant officer
TENURE
0.5 yrs
Board of Directors Tenure

Average tenure and age of the Roots board of directors in years:

2.1
Average Tenure
53
Average Age
  • The average tenure for the Roots board of directors is less than 3 years, this suggests a new board.
Board of Directors

Erol Uzumeri

TITLE
Chairman of the Board
AGE
50

Jim Gabel

TITLE
President
COMPENSATION
CA$889K
AGE
56
TENURE
2.1 yrs

Richard Mavrinac

TITLE
Independent Director
COMPENSATION
CA$115K
AGE
66
TENURE
2.1 yrs

Dale Lastman

TITLE
Lead Director
COMPENSATION
CA$119K
AGE
61
TENURE
2.1 yrs

Eric Zinterhofer

TITLE
Director
AGE
47
TENURE
3.9 yrs

Joel Teitelbaum

TITLE
Independent Director
COMPENSATION
CA$105K
AGE
53
TENURE
2.6 yrs

Gregory David

TITLE
Independent Director
COMPENSATION
CA$104K
AGE
51
TENURE
2.1 yrs

Mary Curran

TITLE
Independent Director
COMPENSATION
CA$70K
TENURE
1.4 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (CA$) Value (CA$)
09. Jan 19 Buy Searchlight Capital Partners, L.P. Company 24. Dec 18 27. Dec 18 59,000 CA$3.00 CA$174,265
22. Dec 18 Buy Searchlight Capital Partners, L.P. Company 18. Dec 18 21. Dec 18 150,000 CA$3.36 CA$493,062
17. Dec 18 Buy Searchlight Capital Partners, L.P. Company 11. Dec 18 17. Dec 18 300,000 CA$3.31 CA$974,544
11. Dec 18 Buy James Gabel Individual 10. Dec 18 10. Dec 18 50,000 CA$3.29 CA$164,495
X
Management checks
We assess Roots's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Roots has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

ROOT News

Simply Wall St News

Despite Its High P/E Ratio, Is Roots Corporation (TSE:ROOT) Still Undervalued?

View our latest analysis for Roots How Do I Calculate A Price To Earnings Ratio? … The formula for price to earnings is: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Roots: P/E of 15.56 = CA$2.67 ÷ CA$0.17 (Based on the trailing twelve months to May 2019.) Is A High P/E Ratio Good? … A higher P/E ratio means that investors are paying a higher price for each CA$1 of company earnings.

Simply Wall St -

Is Roots (TSE:ROOT) A Risky Investment?

When we examine debt levels, we first consider both cash and debt levels, together. … Over the last three years, Roots reported free cash flow worth 14% of its EBIT, which is really quite low. … If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

Simply Wall St -

Is Roots Corporation (TSE:ROOT) Worth CA$3.50 Based On Its Intrinsic Value?

Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. … A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 10-year free cash flow (FCF) forecast 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Levered FCF (CA$, Millions) CA$26.0m CA$18.8m CA$14.7m CA$12.5m CA$11.3m CA$10.6m CA$10.2m CA$10.0m CA$9.9m CA$9.9m Growth Rate Estimate Source Analyst x1 Analyst x2 Est @ -21.94% Est @ -14.77% Est @ -9.76% Est @ -6.25% Est @ -3.79% Est @ -2.07% Est @ -0.86% Est @ -0.02% Present Value (CA$, Millions) Discounted @ 11.68% CA$23.3 CA$15.1 CA$10.5 CA$8.0 CA$6.5 CA$5.5 CA$4.7 CA$4.1 CA$3.7 CA$3.3 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF)= CA$84.6m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … TSX:ROOT Intrinsic value, August 4th 2019 The assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows.

Simply Wall St -

What Kind Of Shareholder Owns Most Roots Corporation (TSE:ROOT) Stock?

Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. … Check out our latest analysis for Roots TSX:ROOT Ownership Summary, July 17th 2019 What Does The Institutional Ownership Tell Us About Roots? … We can see that Roots does have institutional investors; and they hold 12% of the stock.

Simply Wall St -

Need To Know: Roots Corporation (TSE:ROOT) Insiders Have Been Buying Shares

As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.' View our latest analysis for Roots The Last 12 Months Of Insider Transactions At Roots In the last twelve months, the biggest single purchase by an insider was when President James Gabel bought CA$164k worth of shares at a price of CA$3.29 per share. … We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. … TSX:ROOT Recent Insider Trading, July 2nd 2019 Insider Ownership of Roots Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own.

Simply Wall St -

Why We’re Not Keen On Roots Corporation’s (TSE:ROOT) 7.8% Return On Capital

The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Roots: 0.078 = CA$26m ÷ (CA$381m - CA$52m) (Based on the trailing twelve months to February 2019.) So, Roots has an ROCE of 7.8%. … What Are Current Liabilities, And How Do They Affect Roots's ROCE? … Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE.

Simply Wall St -

Is Roots Corporation (TSE:ROOT) A Financially Sound Company?

ROOT’s Debt (And Cash Flows) ROOT's debt levels surged from CA$85m to CA$98m over the last 12 months , which accounts for long term debt. … On top of this, ROOT has generated CA$19m in operating cash flow in the last twelve months, resulting in an operating cash to total debt ratio of 20%, meaning that ROOT’s operating cash is less than its debt. … Next Steps: ROOT’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow.

Simply Wall St -

An Intrinsic Calculation For Roots Corporation (TSE:ROOT) Suggests It's 35% Undervalued

We generally believe that a company's value is the present value of all of the cash it will generate in the future. … Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model? … We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows

Simply Wall St -

Did You Manage To Avoid Roots's (TSE:ROOT) Painful 60% Share Price Drop?

While it may not be enough for some shareholders, we think it is good to see the Roots Corporation (TSE:ROOT) share price up 17% in a single quarter. … During that time the share price has sank like a stone, descending 60%. … The share price recovery is not so impressive when you consider the fall.

Simply Wall St -

Do Institutions Own Roots Corporation (TSE:ROOT) Shares?

Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. … Roots is a smaller company with a market capitalization of CA$171m, so it may still be flying under the radar of many institutional investors. … institutions own shares in the company.

Simply Wall St -

ROOT Company Info

Description

Roots Corporation, together with its subsidiaries, provides women’s, men’s, kids, toddler, and baby apparel; leather goods; footwear; and accessories under the Roots brand. The company operates through two segments, Direct-To-Consumer, and Partners and Other. The Direct-to-Consumer segment sells products through the company’s corporate retail stores and e-commerce. The Partners and Other segment engages primarily in the wholesale of Roots branded products to the company’s international operating partners. This segment is also involved in licensing Roots brand to manufacturing partners; wholesaling Roots branded products to retail partners; and selling custom Roots branded products to business clients. As of February 2, 2019, it operated 114 corporate retail stores in Canada, 7 corporate retail stores in the United States, 117 partner-operated stores in Taiwan, and 37 partner-operated stores in China, as well as e-commerce platforms. The company offers its products in approximately 50 countries. Roots Corporation was founded in 1973 and is headquartered in Toronto, Canada.

Details
Name: Roots Corporation
ROOT
Exchange: TSX
Founded: 1973
CA$85,933,880
42,124,451
Website: http://www.roots.com
Address: Roots Corporation
1400 Castlefield Avenue,
Toronto,
Ontario, M6B 4C4,
Canada
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
TSX ROOT Common Shares The Toronto Stock Exchange CA CAD 25. Oct 2017
OTCPK RROT.F Common Shares Pink Sheets LLC US USD 25. Oct 2017
DB 4RO Common Shares Deutsche Boerse AG DE EUR 25. Oct 2017
Number of employees
Current staff
Staff numbers
2,604
Roots employees.
Industry
Apparel Retail
Retail
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/11/14 00:24
End of day share price update: 2019/11/13 00:00
Last estimates confirmation: 2019/10/09
Last earnings filing: 2019/09/11
Last earnings reported: 2019/08/03
Last annual earnings reported: 2019/02/02


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.