Shares of Root, Inc. (ROOT) plunged 6.23% in pre-market trading on Thursday, despite the company reporting better-than-expected second-quarter earnings and receiving a target price upgrade from Wells Fargo. The sharp decline comes as a surprise given the positive news surrounding the company.

Root Inc reported quarterly adjusted earnings of $1.29 per share for the quarter ended June 30, significantly beating the mean analyst expectation of 56 cents per share. The company's revenue also surpassed expectations, rising 32.9% to $382.90 million, compared to the analyst forecast of $354.22 million. This marks the fourth consecutive quarter that Root has beaten earnings estimates.

Adding to the positive news, Wells Fargo raised its target price for Root, Inc. to $120 from $118. Despite these developments, investors appear to be taking a cautious stance. The sell-off could be attributed to profit-taking, as Root's shares have gained an impressive 72.9% year-to-date. Additionally, market participants might be reacting to undisclosed factors or concerns about the company's future growth prospects, overshadowing the strong quarterly performance and analyst optimism.