We recently published an article titled Why These 15 Financial Services Stocks Are Surging In 2025. In this article, we are going to take a look at where Root, Inc. (NASDAQ:ROOT) stands against the other financial services stocks.

The financial services sector has entered 2025 on a wave of strong performance and renewed investor interest. This sector consists of banking, payments, insurance, and asset management and is a cornerstone of the global economy.

These stocks didn’t do too well during the 2022 downturn, as there was uncertainty regarding whether or not the Federal Reserve would bail out regional banks. However, after the “mini banking crisis” calmed down, these stocks have performed quite well despite the macro trends being uncertain. And for some stocks, that momentum has been even stronger so far this year. It’s worth looking at why.

Even during bear markets, there are pockets of the market that perform exceptionally well. For example, I identified 15 Real Estate Stocks that are up the Most in 2025 in another article.

Methodology

For this article, I screened the best-performing financial services stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

An experienced insurance agent explaining the benefits of an insurance product to a customer.

Root, Inc. (NASDAQ:ROOT)

Number of Hedge Fund Holders In Q4 2024: 16

Root, Inc. (NASDAQ:ROOT) is a technology-driven insurance company that offers automobile and renters insurance products in the United States, leveraging data science and mobile telematics to personalize pricing and risk assessment.

The main catalyst behind Root, Inc. (NASDAQ:ROOT)’s sharp rise in 2025 has been its exceptional revenue growth and a series of earnings surprises. In its most recent quarter, Root reported revenue of $326.7 million, which beat estimates, and posted net income of $22.1 million, far surpassing analyst expectations and continuing a trend of strong performance.

This solid financial performance has led to a 28% jump in the stock price in March alone, and a 187% increase over the past year, as investors have grown increasingly confident in the company’s ability to outpace industry growth.

The consensus price target of $112.67 implies 19.33% downside.

Root, Inc. (NASDAQ:ROOT) stock is up 92.41% year-to-date.

Overall ROOT ranks 3rd on our list of the financial services stocks that are surging in 2025. While we acknowledge the potential of ROOT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ROOT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

 

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

 

Disclosure: None. This article is originally published at Insider Monkey.