Shares of Root Inc., a technology-based auto insurance company, have skyrocketed more than 600% over the past year, driven by the company's remarkable turnaround and its first profitable quarter since going public. The stock's meteoric rise has caught investors' attention, as Root's innovative approach to underwriting and data-driven pricing model have begun to bear fruit.

At the heart of Root's success lies its use of cutting-edge technology and data science. The company leverages driver behavior data collected through its app, including metrics such as speed, mileage driven, and braking patterns, to precisely price its policies. This data-driven approach has allowed Root to better manage risk and improve its underwriting profitability.

The company's efforts have paid off, with Root reporting a stellar third-quarter performance that stunned investors. For the first time since its public listing, Root achieved net income of $22.8 million and earnings per share (EPS) of $1.35, surpassing analysts' expectations of a loss per share. Furthermore, the company's combined ratio, a key measure of profitability in the insurance industry, stood at an impressive 91.1% in Q3 2024, indicating a highly profitable underwriting performance.