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Rollins (ROL)
NYSE:ROL
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Rollins
(NYSE:ROL)
Select Model
Select Model
Rating:74Outperform
Price Target:
$63.00
▲(11.62% Upside)
Rollins' strong financial performance and positive earnings call are the most significant factors driving the overall score. The company's robust revenue growth and efficient operations are key strengths. However, the high P/E ratio and modest dividend yield suggest valuation concerns, while technical indicators provide mixed signals.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust demand for services and effective business strategies, supporting long-term financial health and market expansion.
Cash Flow Generation
Improved cash flow generation enhances financial flexibility, enabling strategic investments and resilience against economic fluctuations.
Successful Acquisition
Successful acquisitions like Saela strengthen competitive positioning and diversify revenue streams, fostering sustainable growth.
Negative Factors
Margin Pressure
Margin pressure from insurance claims can impact profitability, potentially limiting reinvestment capacity and affecting competitive edge.
Increased SG&A Costs
Rising SG&A costs can erode profit margins, necessitating efficiency improvements to maintain financial performance.
Choppy Residential Performance
Inconsistent residential performance due to seasonality may affect revenue stability, requiring strategic adjustments to mitigate fluctuations.
Rollins (ROL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$27.19B
Dividend Yield1.17%
Average Volume (3M)1.56M
Price to Earnings (P/E)54.9
Beta (1Y)0.48
Revenue Growth10.38%
EPS Growth6.62%
CountryUS
Employees20,000
SectorConsumer Cyclical
Sector Strength84
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)0.29
Shares Outstanding484,640,000
10 Day Avg. Volume1,963,074
30 Day Avg. Volume1,555,096
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue7.89
Enterprise Value/Gross Profit15.99
Enterprise Value/Ebitda35.06
Forecast
1Y Price Target
$61.86Price Target Upside9.60% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Rollins Business Overview & Revenue Model
Company DescriptionRollins, Inc., through its subsidiaries, provides pest and wildlife control services to residential and commercial customers in the United States and internationally. The company offers pest control services to residential properties protecting from common pests, including rodents, insects, and wildlife. It also provides workplace pest control solutions for customers across various end markets, such as healthcare, foodservice, and logistics. In addition, the company offers traditional and baiting termite protection, as well as ancillary services. It serves clients directly, as well as through franchisee operations. Rollins, Inc. was incorporated in 1948 and is headquartered in Atlanta, Georgia.
How the Company Makes MoneyRollins generates revenue primarily through its pest control services, which are provided on a subscription basis and include both one-time treatments and ongoing maintenance contracts. The company earns money from residential customers through a series of service plans that typically require annual contracts, ensuring a steady revenue stream. Additionally, Rollins services commercial clients, which can include restaurants, hotels, and other businesses that require regular pest control services. The company also sells pest control products, including insecticides and traps, which contribute to its revenue. Strategic partnerships with local franchises and third-party service providers enhance its reach and service capabilities, further driving revenue growth. Rollins benefits from a strong brand reputation and an established customer base, which supports consistent financial performance.
Rollins Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call reflected a robust performance with strong revenue growth and successful integration of acquisitions, particularly in the commercial and ancillary segments. However, margin pressure from insurance claims and increased SG&A costs were notable challenges. Overall, the positive aspects, including strong cash flow and commercial performance, outweigh the lowlights.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Rollins reported a total revenue growth of 12.1% year-over-year with organic growth of 7.3%.
Commercial Division Performance
Orkin Commercial delivered double-digit recurring growth in Q2, highlighting strong performance in the commercial segment.
Successful Saela Acquisition
The integration of Saela has exceeded expectations, contributing to double-digit growth and being accretive to margins.
Strong Cash Flow
Operating cash flow increased by 21%, and free cash flow was up over 23% compared to the same period last year.
Resilient Ancillary Services
The ancillary services segment achieved 13.9% growth, with organic growth of 10.3%.
Negative Updates
Impact of Insurance Claims
Margin performance faced headwinds due to insurance claims and less vehicle gains in the fleet compared to last year.
SG&A Cost Increases
SG&A costs as a percentage of revenue increased by 40 basis points, driven by insurance and claims.
Choppy Residential Performance
Residential organic growth was somewhat choppy due to seasonality, with a weaker performance in May.
Company Guidance
During the Rollins, Inc. Second Quarter 2025 Earnings Conference Call, the company reported a robust financial performance marked by a 12.1% increase in total revenue and a 7.3% rise in organic growth. The company's gross margin was 53.8%, despite facing headwinds from insurance claims and a decrease in vehicle gains. Rollins achieved a 21% improvement in operating cash flow, with free cash flow increasing by over 23% year-over-year. Additionally, adjusted earnings per share were $0.30, reflecting an 11.1% increase from the previous year. The acquisition of Saela was highlighted as a significant contributor to growth, performing well above expectations and enhancing Rollins' competitive positioning. Looking forward, Rollins anticipates continued strong demand and projects organic growth in the 7% to 8% range for the year, with additional growth from mergers and acquisitions expected to contribute 3% to 4%. The company also aims to maintain a healthy cash flow conversion rate above 100% for the fiscal year 2025.Rollins Financial Statement Overview
Summary
Rollins demonstrates commendable financial health with strong revenue and profit growth, efficient operations, and a stable balance sheet. The company's ability to generate strong cash flows underpins its capacity for sustained growth and strategic investments.Income Statement
Rollins demonstrates strong revenue and profit growth, with a TTM revenue growth rate of 5.37% and consistent net profit margins. The company's gross profit margin stands at 51.80% TTM, indicating efficient cost management. Stable EBIT and EBITDA margins highlight operational efficiency.85
Very Positive
Balance Sheet
The balance sheet is robust, with a debt-to-equity ratio of 0.67 TTM, indicating prudent leverage. The equity ratio of 45.39% reflects a solid equity base, supporting financial stability. However, the ROE of 33.89% suggests effective use of equity to generate profits.78
Positive
Cash Flow
Cash flow performance is strong, with a healthy free cash flow to net income ratio of 1.29 TTM. The operating cash flow to net income ratio of 1.34 indicates excellent cash conversion, and free cash flow growth of 8.87% supports ongoing capital investments.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.57B | 3.39B | 3.07B | 2.70B | 2.42B | 2.16B |
| Gross Profit | 1.76B | 1.67B | 1.50B | 1.30B | 1.18B | 1.02B |
| EBITDA | 803.87M | 771.13M | 705.06M | 592.88M | 569.87M | 447.43M |
| Net Income | 489.32M | 466.38M | 434.96M | 368.60M | 356.56M | 260.82M |
Balance Sheet | ||||||
| Total Assets | 3.18B | 2.82B | 2.60B | 2.12B | 2.02B | 1.85B |
| Cash, Cash Equivalents and Short-Term Investments | 123.03M | 89.63M | 103.83M | 95.35M | 105.30M | 98.48M |
| Total Debt | 967.18M | 812.53M | 816.35M | 336.33M | 402.76M | 417.14M |
| Total Liabilities | 1.74B | 1.49B | 1.44B | 854.83M | 910.32M | 904.54M |
| Stockholders Equity | 1.44B | 1.33B | 1.16B | 1.27B | 1.11B | 941.36M |
Cash Flow | ||||||
| Free Cash Flow | 631.56M | 580.08M | 495.90M | 435.30M | 374.61M | 412.56M |
| Operating Cash Flow | 657.12M | 607.65M | 528.37M | 465.93M | 401.81M | 435.79M |
| Investing Cash Flow | -345.70M | -176.23M | -372.89M | -134.14M | -98.97M | -162.40M |
| Financing Cash Flow | -295.39M | -440.71M | -149.42M | -336.02M | -290.16M | -281.27M |
Rollins Technical Analysis
Positive
56.44
Price Trends
56.94
Negative
56.69
Negative
53.58
Positive
Market Momentum
-0.33
Positive
49.61
Neutral
39.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROL, the sentiment is Positive. The current price of 56.44 is above the 20-day moving average (MA) of 56.40, below the 50-day MA of 56.94, and above the 200-day MA of 53.58, indicating a neutral trend. The MACD of -0.33 indicates Positive momentum. The RSI at 49.61 is Neutral, neither overbought nor oversold. The STOCH value of 39.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROL.
Rollins Risk Analysis
Rollins disclosed 1 risk factors in its most recent earnings report. Rollins reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rollins Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Performance Comparison
ROL
Rollins
56.44
7.10
14.39%
FTDR
frontdoor
66.96
18.34
37.72%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.